Senior management at Australia’s Star Entertainment Group initially disputed the findings of a 2018 report by global audit firm KPMG which outlined alleged failings in Star’s anti-money laundering (AML) procedures, according to evidence tendered during public hearings into the casino operator on Tuesday.
The findings of the report, and Star’s response to them, was central to media reports last October claiming the company had mirrored its local rival Crown Resorts by enabling suspected money laundering, organized crime, fraud and foreign interference.
Former Chief Risk Officer for Star, Paul McWilliams, said during Tuesday’s hearings that the casino giant’s CEO Matt Bekier and Chairman John O’Neill had both furiously disagreed with the findings of the report when it was tabled in 2018, with Bekier labelling it both “wrong” and “unacceptable for the report to be prepared in this way.”
In particular, Bekier and O’Neill are said to have been upset over criticism of how the company dealt with its junket partners. This was despite the report highlighting key AML deficiencies in how it classified high-risk versus low-risk gamblers, alleging Star did not treat those who played with AU$200,000 (US$149,000) any differently than those with AU$5,000 (US$3,700).
In what was described as a “very tense” board meeting at the time, McWilliams said Bekier “[made] a show of throwing [the report] on the table”, making it clear he strongly disagreed with its findings. Such was Bekier’s anger, McWilliams told the inquiry he had started “to wonder if there was in fact something materially wrong with the report,” even though he had already held concerns of his own over Star’s AML compliance.
KPMG partner Alexander Graham, who co-authored the report, also told the inquiry on Tuesday that he had been in a nearby meeting room during the board meeting in question waiting to present to the Star board but was never invited in. Instead, the audit firm held a series of meetings at a later date where the casino operator ran through its concerns, however KPMG would eventually reply that it fully stood by its findings.
Despite his statements regarding the extent of Bekier and O’Neill’s reaction, McWilliams said he felt confident that the company was working to address recommendations contained within the report when he left Star in 2019.
Star also issued a statement last October in which it said media assertions that the KPMG report was kept secret and not adequately acted on were incorrect.
“The actions included The Star adopting an updated AML/CTF Program as a priority in October 2018, and undertaking a program of work to enhance its AML compliance framework, under the Board’s oversight,” Star said.
“The Star remains committed to ongoing continuous improvement of its AML compliance.”
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