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

Gu, who vanished in 2020, left investors with US$245 million in losses through what became one of Australia's largest Ponzi schemes. His company, iProsperity, was heavily involved in Australia's significant investor visa (SIV) program, which offers residency to foreign nationals investing AU$5 million in domestic businesses.

Court filings reveal Gu squandered over US$380 million on gambling, luxury vehicles (including Lamborghinis, a Rolls Royce, and a Ferrari), expensive wine, and private jets. Liquidators have spent four years tracking funds through 64 companies, successfully tracing US$112 million, with US$45 million linked to the casino operators.

A 2022 regulatory inquiry into Star Sydney highlighted Gu's activities, revealing he lost US$3.6 million gambling there from 2017 onward. His associate, Harry Huang, deposited US$9.2 million, including US$960,000 after iProsperity's collapse. The inquiry found Star Sydney unfit for licensing due to anti-money laundering violations.

Evidence emerged of a "secret relationship" between Gu and Star's senior VP of high roller operations, Mark Walker. Gu even offered Walker a US$412,000 position at Casino Canberra during a failed acquisition attempt.

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

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