Legal Report: Australian Casino Faces Class Action Suits
Judicial Decisions
Australia
Casino compliance. Australia’s Star Entertainment Ltd. faces a third class-action lawsuit, which alleges that the casino company failed to comply with disclosure requirements regarding anti-money laundering and counter-terrorism financing rules.
The latest suit, filed in February, was submitted on behalf of company shareholders by the firm Phi Finney McDonald, accusing the casino giant of making misleading representations about Star between March 2016 and June 2022.
Phi Finney McDonald’s suit claims that the company misrepresented its systems and methods for adhering to anti-money laundering and counter-terrorism financing requirements during this time. It also accuses Star of fault in not disclosing that information to the larger market.
The latest suit comes on the heels of two similar ones filed by other parties.
The firm Slater & Gordon filed a class action in March 2022, similarly claiming that the company falsely represented its regulatory compliance efforts. This suit—the first filed—asks for compensation for the shareholders who lost roughly $1 billion after the media reported Star’s alleged misconduct, according to Business News Australia. (DA Lynch Pty Limited v. The Star Entertainment Group Ltd., Supreme Court of Victoria at Melbourne Commercial Court, No. 01039, 2022)
The firm Maurice Blackburn, also representing shareholders, filed its suit in November 2022, making similar claims as Slater & Gordon and Phi Finney McDonald. All three suits are seeking compensation for the shareholders they represent.
United States
Money laundering. Former FBI official Charles McGonigal was arrested in January 2023 for money laundering and violating sanctions set against Russia. McGonigal was charged with Sergey Shestakov, a former Soviet and Russian diplomat, in violating the sanctions placed on Oleg Deripaska, a Russian oligarch.
Federal prosecutors accuse McGonigal of accepting $225,000 while serving as special agent in charge of counterintelligence for the FBI’s New York office. The money was allegedly from a foreign national and former foreign intelligence official. He is also accused of hiding this relationship from the FBI beginning in August 2017.
McGonigal retired in 2018, but he allegedly worked with Deripaska in 2017 to investigate a rival oligarch, according to court documents.
McGonigal pled not guilty to the charges and was released on a $500,000 bond, according to NBC News.
Legislation
United States
Drones. A proposed bipartisan bill would establish an approval process for using drones in the commercial transportation of goods in the United States.
The Increasing Competitiveness for American Drones Act of 2023 was introduced by U.S. senators Mark Warner and John Thune in early February in an effort to ensure “that the U.S. remains competitive globally in a growing industry increasingly dominated by competitors like China,” according to a press release. If passed, the law would require the Federal Aviation Administration to issue create an assessment that would determine what level of regulatory scrutiny various drone operators would need to operate under.
Organized crime. Both houses of the Virginia State Congress approved legislation that will classify organized retail crime (ORC) as a felony in the U.S. state, and those convicted under the law face up to 20 years in prison. HB 1885, which is supported by Governor Glenn Youngkin, qualified that anyone involved in the theft of retail merchandise valued at more than $1,000—specifically within a 90-day period and with the intent to sell the stolen merchandise—can be charged with a Class 3 felony.
Regulations
United States
Compliance. The U.S. Securities and Exchange Commission (SEC) announced it had fined The Church of Jesus Christ of Latter-Day Saints with a $1 million penalty, and an additional $4 million fine was levied against the church’s investment management company. The fines were issued because the organization allegedly failed to disclose certain investments and misstated other filings.
The SEC announced the charges against the church and Ensign Peak Advisers, Inc., on 21 February. Ensign Peak is a nonprofit entity that manages the church’s investments.
The SEC found that Ensign Peak failed to file required forms that disclose the value of certain securities that are worth at least $100 million, according to the commission’s press release. “According to the (SEC) order, the church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences.”
Ensign Peak, with approval from the church, created 13 shell companies and filed the forms under those companies instead of in Ensign Peak’s name, according to the SEC.
Both the church and Ensign Peak agreed to pay the penalties. (In the matter of Ensign Peak Advisors Inc., and The Church of Jesus Christ of Latter-Day Saints, U.S. Securities and Exchange Commission, No. 96951, 2023)
Also of Interest
Security Management reports on instances where security incidents and interests cross paths with the courts, legislation, and regulatory agencies. The following are developing stories of potential significance.
Judicial Decisions
Active shooter. The man accused of killing 23 people in a racially motivated attack at a Texas Walmart pled guilty to federal charges in January 2023. Patrick Crusius is charged with federal hate crimes and firearm violations, as well as capital murder in state court—all of which relate to the 2019 mass shooting.
Clearance. Three active-duty U.S. Marines were arrested in January 2023 for their involvement in the 6 January riot at the U.S. Capitol building. All three men held intelligence roles, even after the attack on the Capitol. One of the men, Sgt. Joshua Abate, confessed to his and his friends’ involvement during a high-level security clearance interview in June 2022.
Espionage. The Royal Canadian Mounted Police (RCMP) charged former Hydro-Quebec researcher Yuesheng Wang with espionage for allegedly attempting to obtain trade secrets for the People’s Republic of China. The Integrated National Security Enforcement Teams (INSET), Canada’s counterespionage agency, opened an investigation into Wang after Hydro-Quebec’s corporate security department filed a complaint, according to the RCMP. Wang faces charges of obtaining trade secrets, unauthorized use of a computer, fraud for obtaining trade secrets, and breach of trust by a public officer. Hydro-Quebec is Canada’s largest electric utility.
Fraud. Two Dubai organizations and various individuals from Turkey were charged for their involvement in a multimillion-dollar scheme to export non-organic grain that was marketed and sold in the United States as organic.
Gun violence. Solomon Peña, who lost his election bid for a State House seat in New Mexico, was arrested for his alleged involvement in a series of shootings that targeted Democratic elected officials. He will await trial in jail after a district court judge ruled that he poses a threat to the officials and their families. Prosecutors accuse Peña of leading and arming a group of people who fired shots into the officials’ homes.
Human trafficking. Interpol arrested an alleged human trafficker, Kidane Zekarias Habtemariam, in Sudan. According to the international law enforcement agency, Habtemariam led a major criminal organization involved in kidnapping, extorting, and murdering East African migrants.
Kidnapping/sexual assault. A Texas man, Zachary Mills, faces charges of kidnapping and assaulting a woman he met on a dating app. Mills is accused of holding a woman hostage for five days in his apartment in Harris County, denying her food and water and assaulting and sexually assaulting her several times.
Negligence. A former boss for British motoring association AA Limited lost a negligence lawsuit filed after he was fired for his involvement in a drunken fight with a colleague. Robert Mackenzie unsuccessfully sued Rosenblatt Solicitors after a failed appeal over his firing. Mackenzie previously unsuccessfully sued The AA for wrongful dismissal.
Organized crime. A suspected member of the Italian mob is currently in custody after spending 16 years evading the authorities. Matteo Messina Denaro was arrested in Sicily after he was taken into custody in a health clinic where he was receiving cancer treatments. Denaro is allegedly a boss of the Cosa Nostra Mafia and in 2022 he was tried in absentia and received a life sentence.
Public health. After refusing treatment for tuberculosis for more than a year, a Washington resident now faces jail time and electronic home monitoring. The infected woman declined to take medication, according to the Tacoma-Pierce County Health Department, and refused to adhere to multiple court orders to remain in isolation. The orders were initially issued in January 2022 in an effort to protect the public. A January 2023 order authorized involuntary detention, testing, and treatment of the woman, whose name has not been released, according to The News Tribune. The escalation of the orders may be linked to the women being a passenger in a car accident, revealing that she had violated orders to remain isolated.
Ransomware. In a federal court in Oregon, a Russian money launderer pled guilty to funneling payments that came from ransomware attacks on Americans. Denis Mihaqlovic Dubnikov, who was extradited to the United States from The Netherlands in August 2022, received the payments that had been generated from Ryuk ransomware. Ryuk, a common kind of ransomware, is regularly linked to Wizard Spider, a Russian hacking group, according to Cyberscoop.
Theft. Authorities arrested nine men in The Netherlands and Belgium for their suspected involvement in various ATM explosions. The men are accused of stealing 5.2 million euros, according to German authorities.
Terrorism. A man allegedly tried to destroy a solar energy facility outside of Las Vegas, Nevada, in January 2023. Las Vegas Metro police arrested and charged Mohammad Mesmarian with committing an act of terrorism, arson, destroying or injuring someone else’s personal property, and escape by a felony prisoner. Authorities claim Mesmarian drove a car through the Mega Solar Array plant’s gate and then set the car on fire.
Terrorism. Sayfullo Saipov—who in 2017 drove a truck onto a bike path in New York City and killed eight people—was convicted of murder in January 2023. Sentencing hearings started in February and could result in Saipov receiving the death penalty.
Voter fraud. The wife of an Iowan county supervisor was charged with 52 counts of voter fraud. Kim Phuong Taylor was arrested for allegedly filling out and submitting absentee ballots in her husband’s 2020 congressional race.
Whistleblower. A former engineer for Twitter told the U.S. Federal Trade Commission that security and privacy violations remain at the company. According to the former employee, any Twitter engineer can access and activate an internal program that allows him or her to post content from any user account.
Workplace violence. Santa Fe’s District Attorney’s Office filed charges against actor Alec Baldwin, accusing him of involuntary manslaughter and involvement in the shooting and death of cinematographer Halyna Hutchins on a movie set in October 2021.
Legislation
Elections. Mexican lawmakers approved massive changes to the country’s electoral agency, including cuts to the agency’s staff, reducing its autonomy, and curbing its power to hold politicians responsible for breaking electoral laws. Critics accuse the move of weakening the nation’s democracy, with some calling it unconstitutional.
Fireworks. Germany is considering again banning the use of fireworks after police and firefighters were attacked on New Year’s Eve 2022.
Labor contracts. The Federal Trade Commission proposed blocking companies from including noncompete agreements in employment agreements.
Social media. The University of Texas announced that it would be blocking the use of TikTok on university Wi-Fi and servers.
Regulations
Fraud. An investigation is looking into a private investment firm in Jamaica and the government’s handling of the case.
Planes. The U.S. Transportation Department is investigating the Southwest Airlines holiday travel meltdown.
