Crown Casino haven for drug traffickers, 'a blot on the community'

Crown Casino is a haven for drug traffickers and money launderers, leading one of Victoria's most prominent judges to label the venue a "blot on the community".

Gambling chips are becoming underworld currency.
Gambling chips are becoming underworld currency. Photo: Getty

The Sunday Age can also reveal that crown's gaming chips have become a de facto currency among underworld figures to hide assets from authorities, trade for drugs and pay debts.

County Court Judge Michael McInerney criticised Crown after hearing several cases related to a major heroin trafficking ring that operated in the casino despite the presence of a large private security force and state-of-the-art CCTV surveillance system.

Illustration: Matt Golding
Illustration: Matt Golding 

"There were meetings at various places, in particular, at the Crown Casino, where both money and drugs changed hands. One hesitates to be too critical of Crown Casino. It is a blot on the community for many reasons, but clearly this is one of them," Judge McInerney said.

"What type of security they institute I fail to understand, for this type of activity to be able to be taking place so freely at the casino. I make that remark in general because over the last week and a half nearly every case relevant to this 'syndicate' has involved dealings and exchange of monies at the casino."

The Sunday Age has previously revealed that a number of high-profile drug dealers live in Crown's hotels, using them as a base to service celebrities, nightclub patrons and wealthy gamblers.

A Crown Melbourne spokeswoman refused to comment on the judge's statements, but said the casino "does not tolerate illegal activity of any kind" and immediately reports any suspect activity to police.

"Crown Melbourne has a long standing and close working relationship with Victoria Police and other law enforcement agencies, who value Crown's work in identifying criminals and bringing them to justice," she said.

Crown said its security unit received a citation from Victoria Police for its assistance and "substantial contribution" to a major drug operation in 2015.

But the ABC's Four Corners program recently revealed Crown had hosted Wei Seng "Paul" Phua, a Malaysian high-roller and gambling industry magnate with links to Asian crime syndicate the 14K Triad, as recently as last month.

In another major incident, high roller Peter Tan Hoang was murdered in 2014 in the wake of an investigation into an international drug and money laundering syndicate that saw more than $1 billion in suspect cash pass through Crown Casino over a 10-year period to 2012.

An investigation by The Sunday Age has also found that large quantities of Crown's gaming chips are being seized during drug trafficking investigations, pointing to a strong, long-term link between organised crime, money laundering and legalised gambling.

Police raids on a major drug syndicate uncovered more than $4 million in proceeds of crime, including at least $600,000 in casino chips "derived from the sale of heroin", a court was told last year.

In 2014, Victoria Police's Operation Volante seized another $600,000 in chips after smashing a 26-person drug ring that had amassed more than $10 million in property assets, cash and luxury goods.

A dealer pulled over during a traffic stop was also found carrying heroin, ice, $5365 in cash and $5300 in chips. Another drug raid uncovered two chips worth $5000 each.

Sources say that gaming chips are used like a de facto currency that is very hard for police to trace but widely accepted among underworld figures.

 

"Chips are basically cash," a source said. "You can carry around a huge stack of bills to make up $25,000 or you can put a handful of chips in your pocket."

"Which one do you think is easier to hide or explain to the police or tax office why you have it?"

The chips can be used to conceal illicit income, trade for drugs, make loans and pay debts.

In one case, an offender transferred $300,000 into a Crown betting account in defiance of a court freezing order and had the sum converted to chips.

"He said that he used about 80 per cent of the $300,000 to pay debts, apparently for drugs and gambling, and that he used the rest for living expenses and $5000 for personal gambling," the Supreme Court of Victoria heard last year.

A man once even attempted to hire a hitman using a $1000 casino chip as a deposit on the contract killing of his wife.

Loan sharking operations linked to and based at the casino are often cited as a reason problem gamblers become criminals.

In the case heard by Judge McInerney, the court was told that one of the offenders had visited Crown on 529 days in less than three years, where her gambling problems led to a $50,000 debt to loan sharks and then involvement in the drug trade.

A $31,000 casino debt has also been attributed to a man's decision to become a "crop sitter" for a marijuana operation.

A Swinburne University study found gambling debts incurred via loan sharks operating at Crown has been a major influence in driving a spike in drug-trafficking crimes for Vietnamese women in Melbourne.

Despite these kinds of incidents, the Victorian Commission for Gambling and Liquor Regulation gave Crown a clean bill of health in the latest review of the casino's operations, in 2013.

"The VCGLR is of the view that since 2008 Crown Melbourne Limited has managed the issues arising from criminal activity at the Melbourne Casino well," the agency said.

Government regulations that classify gambling winnings as legitimate, tax-free income is also being exploited by underworld figures to launder money.

Illicit cash exchanged for chips on gaming tables can be, ultimately, claimed back in the form of a cheque or bank transfer, making it "clean" money.

Crown Casino provides cheques upon request for gambling winnings valued at more than $5000.

"You need them to write 'winnings' on the cheque. They are supposed to confirm that you actually won that on the table. Sometimes they do, sometimes they don't," a veteran gambler said.

Dirty money can also be mixed with legitimate funds and funnelled through the casino.

An underworld source said cash or chips are given to high-roller gamblers that are able to obscure their source due to their substantial level of turnover. It is later "returned" in the form of loans, debt repayments or gifts.

Federal police are currently running a proceeds of crime prosecution that saw one alleged offender turn over more than $4 million in suspicious funds via a Crown betting account.

Under the law, transactions over $10,000 – or any deemed "suspicious" – are reported to the anti-money laundering authority, the Australian Transaction Reports and Analysis Centre (AUSTRAC), for potential investigation.

cvedelago@theage.com.au