NSW: Former Crown CEO Unaware of Possible Money Laundering

John Alexander, Chairman of Crown Resorts and former CEO of the casino operator could not recall being briefed about millions in cash found out in a junket’s private gambling room in the casino. The former media executive, now right-hand man of James Packer, was grilled during the ongoing investigation by the Independent Liquor and Gaming Authority (ILGA) in New South Wales (NSW), Australia, assessing the suitability of Crown to hold a casino license for its newly built casino resort near Sydney.

Reports Part of a Deceitful Campaign

Alexander’s role in defense of Crown Resorts regarding allegations the company was turning a blind eye to money laundering was put under the microscope. In June 2019, Crown published a full-page advertisement, arguing that reports in the Sydney Morning Herald and the Age were part of a “deceitful campaign”. The stringent defense was also issued to the Australian Stock Exchange (ASX).

The press reports also alleged Crown for partnering with junket operators which had close links to organized crime. In some cases, besides sharing the takings from the high-rollers, junkets operate high-roller rooms within a casino, as was the case with Suncity in Crown Melbourne.

Suncity In Focus

Asked by the commissioners whether he was aware that AUSTRAC, the cash transactions monitoring body in Australia, had raised with Crown’s compliance officer, Joshua Preston, the relationship with the Suncity junket, Alexander, who was CEO by that time, did not recall being briefed on the matter. He further pointed out Joshua Preston was not a direct report of his.

John Alexander was then shown an e-mail from Joshua Preston in which the compliance officer updated Alexander about Suncity and informed him that AU$5.6 million in cash had been found in a cupboard in the Suncity high-roller room. The former Crown CEO replied he did not recall reading the email, but agreed that it should have been directed to the risk committee for discussion.

A confidential report by Berkeley Research Group and commissioned by Crown which detailed findings into Crown’s junket partners was the next point of focus for Alexander and the commission. Asked to read a summary on Alvin Chau, the main figure behind Crown’s largest junket Suncity, allegedly a member of the Chinese crime gang 14K triad, Alexander remained poker faced and what the report said was not revealed.

In the 2019 ad Crown claimed it had robust vetting processes for junket partners and defended its relationship with Suncity, and these claims now came full circle to haunt Alexander, who had to agree some of the claims were not accurate. Questioned who vetted the accuracy of the ad, John Alexander responded that it had been vetted by the head of VIP gaming business Barry Felstead and Joshua Preston.

Money Laundering Through Crown Deposit Accounts

Alexander was also asked about an article in the Nine media in August 2019 which claimed two bank accounts, the Riverbank and Southbank, operated by Crown for anonymous cash deposits by patrons, were used to launder funds from drugs.

The former Crown CEO responded that no one made him aware that the Commonwealth bank was prompted to investigate possible money laundering behind the accounts, and that ANZ bank had dropped the accounts due to such concerns, much to the dismay of Patricia Bergin SC, the commissioner conducting the inquiry.

‘‘Your answer is that you didn’t know. If you don’t know, what chance has the regulator got?”

Patricia Bergin SC

She also reminded him that the inquiry is about a suitability to hold a casino license for both Alexander and the company, but Alexander will be stepping down from the board at the Annual General Meeting (AGM), October 22.