Liquidators pursuing the illicit profits of runaway corporate fraudster Michael Gu are getting ready to take legal action 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 approximately US$245 million in debt. 

iProsperity was a key participant in Australia's significant investor visa program (SIV) – a governmental initiative that provides residency visas to foreign investors willing to put AU$5 million into local businesses. It also proved to be one of the largest Ponzi schemes in Australia. 

Enormous Deception 

Gu wasted over half of the approximately US$380 million the company secured in funding on gambling, high-end vehicles, and costly personal loans, as reported by the SMH. 

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

In the run-up to the company's downfall, Gu and his close associate, Harry Huang, wagered millions at the Star Sydney and Crown Melbourne, an act that the lawsuit will claim exemplified money laundering. 

Following iProsperity’s downfall, liquidators have dedicated four years to investigating a complex web of 64 firms associated with Gu in an attempt to locate the funds. 

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

Gu’s name was prominently mentioned in a 2022 public regulatory investigation regarding the licensing suitability of the Star Sydney. The investigation ultimately determined that the operator was noncompliant with anti-money laundering laws and unsuitable to retain a license due to evidence of extensive fraud. 

The investigation revealed that Gu lost US$3.6 million gambling at the Star Sydney starting in 2017, whereas Huang deposited a sum of US$9.2 million — with US$960,000 deposited after the collapse of iProsperity. 

‘Hidden Connection’ 

In the meantime, the casino's senior vice president of high roller operations, Mark Walker, "upheld a concealed and enduring relationship" with the fraudster, as stated in the documents. 

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

On Friday, a federal court in Victoria approved a funding plan for the lawsuit aimed at recovering funds associated with Gu from the two casino companies, as well as individuals and firms linked to the fraudster. 

Gu's location is still a mystery.