The corporate regulator has launched legal action against 11 current and former Star Entertainment directors and executives over alleged Corporations Act breaches related to money laundering.
The Australian Securities and Investments Commission says Star's board and executives failed to adequately manage the risk of money laundering and criminal associations occurring in its casino operations.
Star board members between 2017 to 2019, including former chair John O'Neill and former managing director and chief executive Matthias Bekier have been named in the case.
There are also claims against Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin, Benjamin Heap and Zlatko Todorcevski.
They are facing millions of dollars in fines for allegedly breaching their duties as directors under the Corporations Act.
ASIC alleges the board members approved the expansion of Star's relationship with certain individuals with reported criminal links, rather than addressing money laundering risk.
The commission also alleges that the board failed make further enquiries about those critical risks after it was provided with information about the money laundering risks that could impact Star, and that this was a breach of director duty obligations under the Corporations Act.
ASIC further alleges that Mr Bekier, former company secretary and group general counsel Paula Martin and former chief casino officer Greg Hawkins breached their duties.
This is related to their alleged failure to adequately address the money laundering risks that arose from dealing with Asian gambling junket Suncity and its funder.
Suncity and its funder organised trips for high-roller overseas customers, known as junkets, to visit Star casinos.
It was Star's largest junket customer and Star's turnover from Suncity was about $2.1 billion, $4 billion and $5.9 billion for the financial years 2017, 2018 and 2019, respectively.
Mr Bekier, Ms Martin and Mr Hawkins are also accused of continuing to deal with the group despite becoming aware of reports of criminal links and failing to appropriately escalate money laundering issues to Star's board.
Ms Martin and former chief financial officer Harry Theodore allegedly "knowingly permitted" misleading statements to be made to the National Australia Bank about the use of China Union Pay International Ltd debit cards at NAB's ATMs on Star's premises.
"Those statements disguised the fact that Star was permitting the Chinese cards to be used for gambling, which was prohibited by China Union Pay International Ltd," an ASIC spokesman said.
Over $900 million was allegedly withdrawn or transferred by Star customers using CUP cards in NAB ATMs from 2013 to 2019.
ASIC also alleges Mr Bekier failed to report these matters to Star's board.
In a statement, Star Entertainment Group said it and its subsidiaries were not parties to the legal proceedings.
"ASIC has indicated it will commence civil penalty proceedings in the Federal Court against a number of current and former directors, and past executives of The Star," a spokesman said.
"The proceedings concern matters which were the subject of regulatory inquiries in NSW and Queensland."
Breaches of director's duties under s180 of the Corporations Act attract a maximum penalty of $1,050,000 for each breach in the period of 2017 to 2019.
