Liquidators pursuing the ill-acquired profits of fugitive corporate fraudster Michael Gu are set to file a lawsuit against Australian casino operators Crown Resorts and Star Entertainment for as much as US$45 million, according to The Sydney Morning Herald. 

Gu asserted he was a successful, upscale property developer until his disappearance in 2020, leaving investors in his iProsperity Group with debts totaling approximately US$245 million. 

iProsperity played a key role in Australia's significant investor visa program (SIV) – a government initiative that grants residency visas to foreigners willing to invest AU$5 million in local enterprises. It also emerged as one of Australia’s largest Ponzi schemes. 

Enormous Deception 

Gu spent over half of the approximately US$380 million that the company secured in funding on gambling binges, luxury vehicles, and costly personal loans, as reported by the SMH. 

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

Before the company's downfall, Gu and his associate, Harry Huang, wagered millions at the Star Sydney and Crown Melbourne, actions the lawsuit will claim exemplified money laundering. 

Following iProsperity’s downfall, liquidators have dedicated four years to scrutinizing a complex web of 64 companies associated with Gu in pursuit of the funds. Although a significant amount is still unaccounted for, they have located approximately US$112 million, which they are seeking to recover through civil lawsuits. Approximately US$45 million is associated with accounts at the two gaming companies. 

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

The investigation revealed that Gu suffered a loss of US$3.6 million through gambling at the Star Sydney starting in 2017, whereas Huang made deposits totaling US$9.2 million — including US$960,000 following the collapse of iProsperity. 

‘Hidden Connection’ 

At the same time, filings indicate that the casino’s senior vice president of high roller operations, Mark Walker, “had a hidden and enduring relationship” with the fraudster. 

In 2018, Gu even proposed Walker a US$412,000 position to manage the Casino Canberra, after Gu sought to acquire a controlling interest in the enterprise 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 lawsuit aimed at recovering funds associated with Gu from both casino operators, along with other individuals and entities related to the fraudster. 

Gu’s location is still not known.