Liquidators chasing the ill-gotten gains of fugitive corporate fraudster Michael Gu are preparing to sue Australian casino operators Crown Resorts and Star Entertainment for up to US$45 million, The Sydney Morning Herald reports.
Gu claimed to be a high-flying, high-end property developer until he disappeared in 2020, owing investors in his iProsperity Group around US$245 million.
iProsperity was a major player in Australia’s significant investor visa initiative (SIV) – a government program that offers residency visas to foreign nationals prepared to invest AU$5 million in domestic businesses. It also turned out to be one of Australia’s biggest Ponzi schemes.
Massive Fraud
Gu blew more than half of the roughly US$380 million the company raised in funding on gambling sprees, luxury cars, and expensive personal loans, according to the SMH.
Gu bought two Lamborghinis, a Rolls Royce Wraith, a Ferrari GTB, an Audi Q7, and a McLaren Spider. He drank $3,000 bottles of wine and traveled by private jet, per court filings.
In the lead up to the company’s collapse, Gu and his right-hand man, Harry Huang, gambled millions of dollars at the Star Sydney and Crown Melbourne, which the lawsuit will suggest was the hallmark of money laundering.
Since iProsperity’s collapse, liquidators have spent four years examining a byzantine network of 64 companies linked to Gu in search of the money.
While much remains missing, they have traced around US$112 million, which they are attempting to claw back through civil litigation. Around US$45 million is linked to accounts at the two casino operators.
Gu’s name featured prominently in a 2022 public regulatory inquiry into the Star Sydney’s licensing suitability. The inquiry ultimately found the operator to be noncompliant with anti-money laundering regulations and unfit to hold a license amid evidence of widespread fraud.
The inquiry heard that Gu lost US$3.6 million gambling at the Star Sydney from 2017 onwards, while Huang deposited a total of US$9.2 million — US$960,000 after iProsperity collapsed.
‘Secret Relationship’
Meanwhile, the casino’s senior vice president of high roller operations, Mark Walker, “maintained a secret and longstanding relationship” with the fraudster, according to filings.
In 2018, Gu even offered Walker a US$412,000 job running the Casino Canberra, after Gu attempted to buy a controlling stake in the business for a $32 million from the Hong Kong billionaire, Tony Fung. The deal ultimately failed to pass regulatory muster.
On Friday, a federal court in the state of Victoria approved a funding proposal for the lawsuit to retrieve money linked to Gu from the two casino operators, as well as from other individuals and companies connected to the fraudster.
Gu’s whereabouts remain unknown.
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