Crown Resorts, Star Entertainment Sued for Fraudster’s Missing Millions

Crown Resorts, Star Entertainment Sued for Fraudster’s Missing Millions

Liquidators pursuing the wrongfully obtained assets of fugitive corporate fraudster Michael Gu are set to file lawsuits against Australian casino companies Crown Resorts and Star Entertainment for as much as US$45 million, according to The Sydney Morning Herald. 

Gu asserted he was a prominent, upscale real estate developer until his disappearance in 2020, leaving investors in his iProsperity Group with debts of approximately US$245 million. 

iProsperity played a key role in Australia’s significant investor visa program (SIV) – a government scheme that grants residency visas to foreign individuals willing to invest AU$5 million in local businesses. It also became one of the largest Ponzi schemes in Australia. 

Enormous Deception 

Gu spent over half of the approximately US$380 million raised by the company on extravagant gambling, luxury vehicles, and costly personal loans, as reported by the SMH. 

Gu acquired two Lamborghinis, a Rolls Royce Wraith, a Ferrari GTB, an Audi Q7, and a McLaren Spider. According to court documents, he consumed $3,000 bottles of wine and flew on a private jet. 

As the company approached its downfall, Gu and his assistant, Harry Huang, wagered millions at the Star Sydney and Crown Melbourne, an action the lawsuit will claim exemplified money laundering. 

Following the downfall of iProsperity, liquidators have dedicated four years to investigating a complex web of 64 companies associated with Gu in pursuit of the funds. 

Although a lot is still unaccounted for, they have identified nearly US$112 million, which they are trying to recover via civil lawsuits. Approximately US$45 million is associated with accounts at the two casino companies. 

Gu’s name was highlighted in a 2022 public regulatory investigation regarding the Star Sydney’s licensing appropriateness. The investigation ultimately concluded that the operator violated anti-money laundering regulations and was unsuitable to possess a license due to evidence of extensive fraud. 

The investigation revealed that Gu lost $3.6 million at the Star Sydney through gambling from 2017 onwards, while Huang made a total deposit of $9.2 million — $960,000 after the collapse of iProsperity. 

‘Undercover Connection’ 

In the meantime, the casino's senior vice president for high roller operations, Mark Walker, “kept a clandestine and enduring relationship” with the fraudster, as stated in the documents. 

In 2018, Gu proposed a US$412,000 position to Walker to manage Casino Canberra, following Gu's effort to acquire a controlling interest in the company for $32 million from Hong Kong billionaire Tony Fung. The agreement ultimately did not meet regulatory approval. 

On Friday, a federal court in Victoria sanctioned a funding plan for the legal case aimed at reclaiming funds associated with Gu from both casino operators, and from various individuals and firms related to the fraudster. 

Gu’s location is still not known.