Posted on: March 22, 2022, 07:39h.
Last updated on: March 22, 2022, 08:36h.
Australia’s Star Entertainment Group continues to be the focus of attention over alleged breaches of anti-money-laundering (AML) policies and more. The casino operator’s boss allegedly became aware of issues years ago, but apparently ignored the signs.
“Wrong” and “unacceptable.” These are the words Star Entertainment boss Matt Bekier used to describe an audit KPMG conducted in 2018. New South Wales (NSW) continues to grill current and former employees of the company. As it does, more details are emerging over how it seemed to refuse to respond to questions over certain practices.
The revelations are indicative of an executive culture that may have ignored established policies and procedures. The anecdotes also could bring to an end the careers of several long-time executives, as well as put in jeopardy the future of Star’s operations.
Blinded by the Light
In May 2018, accounting firm KPMG delivered a report to Star’s brass. It found that the company was lax in its AML controls and recommended several adjustments. Millions of dollars were arriving to the Star Sydney from VIP gamblers, no questions asked.
However, as the NSW Independent Liquor and Gaming Authority (ILGA) learned this week, Bekier (like actor Jack Nicholson in the 1992 film A Few Good Men) couldn’t handle the truth. The Sydney Morning Herald reports that Paul McWilliams is now in the regulator’s hot seat. The former chief risk officer at Star explained this week that his concerns about company practices were echoed in the KPMG report.
When Bekier received the findings, the CEO allegedly threw a tantrum in a meeting of the executive minds over the report. He asserted that the findings were “unacceptable” and contained factual errors.
The audit showed a “fundamental deficiency” in the company’s AML program. However, company chairman John O’Neill sided with Bekier, which effectively blocked any changes. It also caused other executives to doubt the report, since “The boss is always right.”
Mr Bekier was sat down, turning the pages of the report, essentially berating us for the whole entire time of that meeting,” stated KPMG employee Alexander Graham.
An “unprofessional” Bekier even told KPMG in a subsequent meeting that it didn’t know what it was doing. He said the firm didn’t know what it was talking about as he remained “in a sulk.”
McWilliams left Star the following year.
More Damning Evidence Surfaces
During the inquiry, the IGLA also learned that Star repeatedly worked with junkets without conducting risk assessments on those operators. McWilliams confirmed that it was possible for someone to walk into the Star Sydney with $200,000 in cash, no questions asked. Star gave junkets a pass because, according to the company, it wasn’t easy to identify the source of funds of their customers.
These latest admissions, together with an acknowledgment that Star fudged paper trails to hide high roller spending, don’t bode well for the company’s future. They also put an undue burden on the entire casino industry, which has always fought the stigma of being an easy mark for money laundering.
Star set itself up to receive the same treatment NSW gave to Crown Resorts. Its own dereliction of duty led it to where it is today. The inquiry continues this week, but will likely wrap up quicker than the Crown inquiry. As a result, a Star shakeup could be right around the corner.