Crown Instructed Employees to Use Codewords
Crown Resorts instructed its employees to use codewords when discussing its Chinese operations. Court documents show Crown tried avoiding a crackdown on gambling in China by using codewords and running an unofficial office in Guangzhou.
Employees used codewords as Crown attempted to conduct business in China covertly. The gambling giant employed other measures, which included running an unofficial and covert office in Guangzhou, misleading authorities about the purpose of flights, and providing letters to show to Chinese officials that failed to mention Crown’s casino business.
Law firm Maurice Blackburn filed documents in the federal court this week. Those documents are part of a class-action lawsuit it is running on behalf of Crown’s shareholders. Angry shareholders saw their investment’s value shrink by 14% in October 2016 when Chinese authorities detained several Crown employees.
The law firm filed the lawsuit in 2017 and was due to be heard in November 2018. The Bergin Inquiry delayed the hearing, which is now scheduled for October 2021.
Maurice Blackburn alleges Crown’s senior executive knew about Chinese authorities cracking down on offshore gambling operators. Crown knew about this in February 2015, a full-year before the high-profile arrests.
Codewords Allegation Not Previous Aired
The Begrin Inquiry uncovered much wrongdoing on Crown’s part, including money-laundering. Also, Crown’s open use of casino junkets linked to organised crime came to light.
The use of codewords is something new and adds weight to claims Crown knew it was doing wrong before the arrests of 19 staff members.
Benny Xiong is one of the 19 former Crown staff police arrested in 2016. Police questioned Xiong and accused him of organising Chinese nations to gamble in Australia. Xiong claims Crown gave him a letter to show to Chinese authorities that omitted any gambling references.
Maurice Blackburn highlights the instructions to use codewords when conducting business with Chinese people.
“Crown employees to use codewords when discussing Crown’s China operations on telephone calls that took place with a least one employee in China.”
Why would Crown demand using codewords if everything was above board?
Further Allegations Show Crown In A Bad Light
Other allegations fail to show Crown in a positive light. In contrast, Crown’s actions make them look guilty as sin.
Chinese authorities announced a crackdown on the promotion of gambling in February 2015. Crown removed all its livery from its fleet of jets within three days of learning this. Additionally, Crown lied on flight permits to and from China, claiming those on board attended meetings in Australia. There was no mention of gambling.
Furthermore, Crown paid for a semi-residential building, leased in employees’ name, where its administration functions took place. Employees processed visa application from this venue.
In addition, law firm WilmerHale warned Crown of the Chinese crackdown in early February 2015. WilmerHale warned Crown to avoid activities that could be viewed as attracting Chinese gamblers offshore.
Lawsuit Damaging to Ongoing Investigations
The lawsuit’s fresh allegations are extremely damaging to Crown already tarnished reputation. The Bergin Inquiry deemed Crown unfit to hold a Sydney gaming licence. That decision left Crown unable to open the casino at its $2.2 billion Barangaroo complex.
Crown faces the genuine prospect of losing its Melbourne gaming license. Panic has already set in, with several key board members resigning from their roles. Crown promised to cease activities with junkets in a big to please investigators.
These latest allegations could mean those drastic steps were for nothing.
Victorian Gaming Minister Melissa Horne ordered a royal commission into Crown’s affairs. She did this after scouring through the 800-page report, which is damning of Crown’s affairs. The Royal Commission’s findings could result in Crown stripped of all gambling licences.
“The finding in there were so severe that the most appropriate action to protect Victorian interests was the establishment of a royal commission. The Royal Commission will establish the facts, and the Government and the VCGLR will take any necessary action at the conclusion of the investigation. We will not tolerate illegal behaviour in our gaming industry.”