Two former executives of the Star Entertainment Group have been fined for breaching the Corporations Act, in one of the relatively rare high profile white collar crime resolutions to reach an Australian court. The penalties relate to whether the executives properly carried out their director's duties at the casino group.
Star Casino, the second largest casino group in Australia, had faced allegations of essentially facilitating money laundering and consorting with criminal gangs. Those allegations led to multiple state inquiries and royal commissions, before the matter eventually reached civil court, where the question was whether the executives had done their job in managing the risks.
The court found that the most senior figures had not met their obligations. For the former chief executive of Star Casino, Matt Bekier, that meant a penalty of 700,000 dollars and disqualification from being involved in running businesses for six years.
The former chief legal officer, Paula Martin, who acted as a kind of general counsel for Star, received a fine of 400,000 dollars and was disqualified from running companies for seven years. The penalties were described as substantial, although not as high as had originally been expected, and not as high as the corporate regulator ASIC had sought.
Before the trial, ASIC had reached a plea deal with two slightly more junior executives, who received fines of 180,000 dollars and 90,000 dollars and then appeared as witnesses during the proceedings. That approach drew pointed criticism from the bench.
Justice Michael Lee took issue with the regulator agreeing to softer penalties for the more junior people and then asking the court to throw the book at the more senior executives. He indicated that a regulator could not give lower penalties to those lower down and then seek very large penalties against the senior members, a point that senior lawyers are expected to examine closely.
The case reflects a common pattern in such matters, where lower level employees are encouraged to blow the whistle on conduct in exchange for lighter treatment. For now, the outcome leaves the most senior leaders of Star facing substantial civil penalties of 700,000 dollars and 400,000 dollars, along with bans from running companies for several years.