Australian casino operators Crown Resorts and Star Entertainment face a US$45 million lawsuit from liquidators pursuing funds linked to fugitive fraudster Michael Gu's iProsperity Group Ponzi scheme.

Gu, who vanished in 2020, left investors approximately US$245 million in debt. His company, iProsperity, was deeply involved in Australia's significant investor visa (SIV) program, which offers residency to foreign nationals investing AU$5 million in Australian businesses.

Court filings reveal Gu squandered over US$380 million on gambling, luxury vehicles (including Lamborghinis, a Rolls Royce, and a Ferrari), private jets, and expensive wine. He and associate Harry Huang gambled extensively at Star Sydney and Crown Melbourne, activities the lawsuit suggests were characteristic of money laundering.

After four years investigating 64 companies connected to Gu, liquidators have traced US$112 million, with US$45 million linked to the two casino operators. The Star Sydney's 2022 regulatory inquiry highlighted Gu's activities, revealing he lost US$3.6 million gambling there from 2017 onward, while Huang deposited US$9.2 million.

The investigation also uncovered a covert relationship between Gu and Mark Walker, Star's senior VP of high-roller operations. In 2018, Gu offered Walker a US$412,000 position at Casino Canberra during his unsuccessful US$32 million bid to acquire the establishment.

A Victoria federal court has approved funding for the lawsuit to recover funds from both casino operators and other parties connected to Gu, whose current location remains unknown.

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