Posted on: July 5, 2021, 03:58h.
Last updated on: July 5, 2021, 04:35h.
A fugitive fraudster accused of running a A$325 million (US$245 million) Ponzi scheme passed $8 million of his clients’ missing funds through the Crown Melbourne Casino, Australian newspaper The Age reports.
Michael Gu, whereabouts unknown, is the founder of Sydney-based property group iProsperity, which collapsed last year owing hundreds of millions to investors.
Authorities believe he conned clients by claiming he was buying a portfolio of commercial property in Australia. In fact, he and his CFO, Harry Huang, were misappropriating investor funds to pay other investors while living the high life, according to a report by administrator KPMG, published last August.
Gu allegedly used the company like his own personal piggy bank, taking at least $21.5 million in director’s loans that he failed to repay. He splurged on supercars: two Lamborghinis, a Rolls Royce Wraith, a Ferrari GTB, an Audi Q7, and a McLaren Spider. According to Australian media, he drank $3,000 bottles of wine and travelled by private jet.
‘Hallmarks of Money Laundering’
Awkwardly for Crown Resorts, in a new report to creditors, liquidator Cor Cordis said some of the iProsperity fund also ended up at the Melbourne property. Either Gu or Huang sent the $8 million to Crown Melbourne between August 2014 and May 2017, according to the liquidator.
According to The Age, Gu then either withdrew the money or used it for gambling. The transactions had the “hallmarks of money laundering,” the newspaper said.
We are treating this matter seriously and have immediately launched an investigation into the allegations. Crown will ensure regulators, the royal commissions, and other relevant authorities are informed and updated as required,” said Crown in a statement.
Australian media allegations against Crown of financial misconduct led to a licensing suitability investigation in New South Wales that stripped the company of its Sydney license.
Regulators found that Crown’s VIP gambling division facilitated money laundering and conducted business with foreign junkets that had links to organized crime.
The loss of its license has prevented it from opening the gaming facilities at its US$2 billion Crown Sydney property as planned.
Put it on the Room
Meanwhile, an investigation in the state of Victoria reviewing Crown’s Melbourne license heard last week that the company facilitated the movement of more than A$160 million (US$120 million) out of China over four years.
Crown allowed high rollers to make payments from Chinese credit cards to hotel reception for rooms that did not exist. The transactions were then converted to cash for the patrons to gamble with at the casino.
The system required the creation of fake invoices for the bogus rooms, possibly in violation of Australian law.