Published on: December 16, 2024, 04:40h.
Last updated on: December 16, 2024, 04:41h.
Liquidators pursuing the illegally obtained money of fugitive corporate fraudster Michael Gu are gearing up to file lawsuits against Australian casino operators Crown Resorts and Star Entertainment for up to US$45 million, as reported by The Sydney Morning Herald.
Gu posed as a wealthy property developer until his disappearance in 2020, leaving investors in his iProsperity Group owed around US$245 million.
iProsperity was a significant participant in Australia’s significant investor visa initiative (SIV) – a government program offering residency visas to foreign nationals investing AU$5 million in local businesses. However, it turned out to be one of Australia’s largest Ponzi schemes.
Extensive Deception
Gu spent over half of the company’s roughly US$380 million raised funding on gambling, luxury cars, and costly personal loans, according to the SMH.
Gu acquired two Lamborghinis, a Rolls Royce Wraith, a Ferrari GTB, an Audi Q7, and a McLaren Spider. He indulged in $3,000 bottles of wine, private jet travel, and extravagant spending.
Prior to the company’s collapse, Gu and his associate Harry Huang gambled millions at the Star Sydney and Crown Melbourne, suggesting potential money laundering in the impending lawsuit.
Following iProsperity’s collapse, liquidators spent four years unraveling a complex network of 64 Gu-related companies to trace the money.
While a significant amount is still missing, they identified around US$112 million, and are now pursuing legal action to recover it. About US$45 million is linked to accounts at the two casino operators.
Gu’s name was prominently featured in a 2022 public regulatory inquiry concerning the Star Sydney’s licensing suitability. The investigation revealed the operator’s noncompliance with anti-money laundering rules and unsuitability for holding a license due to substantial fraud evidence.
The inquiry disclosed Gu losing US$3.6 million gambling at the Star Sydney starting from 2017, with Huang depositing a total of US$9.2 million, including US$960,000 post iProsperity’s collapse.
‘Covert Relationship’
Meanwhile, the casino’s senior vice president of high roller operations, Mark Walker, was found to have a “secret and longstanding relationship” with Gu, as indicated in documents.
In 2018, Gu offered Walker a US$412,000 position to oversee the Casino Canberra, after a failed attempt to acquire a controlling stake in the business for $32 million from Hong Kong billionaire Tony Fung due to regulatory obstacles.
On Friday, a federal court in Victoria approved a funding proposal for retrieving money tied to Gu from the two casino operators and other entities linked to the fraudster.
Gu’s current whereabouts remain unknown.