The Sydney Morning Herald
’s Kate McClymont and Jacquelin Magnay are conducting a good old-fashioned investigation into the murky affairs of two of Sydney’s richest registered clubs, the Parramatta Eels and Cronulla Sharks.
Yesterday’s front page carried a photo gallery of the stars of their inquiry, including Roy Spagnolo, embattled chairman of the Eels; Domenic Sergi, brother of Pat Sergi who was named in the Woodward royal commission into drug trafficking; and George Gaitanos, developer and business partner of Spagnolo and Roy Mittiga, who has served time for insurance fraud.
Roy Spagnolo is Domenic Sergi’s brother-in-law. Spagnolo, Pat Sergi and Roy Mittiga have been directors of western Sydney development companies that failed leaving a list of creditors including the Australian Taxation Office.
When he entered parliament in 1995 as Labor MP for Fairfield, Joe Tripodi used these words to generously thank his supporters his inaugural speech: "During my election campaign I made many new friends in the local Italian community who assisted me, namely, Michael Daniele, Sam Romeo, Roy Spagnolo, Tony Mittiga and Pat Sergi. These people are friends I intend to keep for a long time."
As Minister for Finance, Infrastructure, Regulatory Reform, Ports and Waterways, Tripodi is now one of the most powerful politicians in NSW. But there is no suggestion that he has kept in touch with these individuals or is involved in their current activities.
While Spagnolo is under intense pressure at Parramatta, the Sharks CEO Tony Zappia has been forced to resign and his tenure at the club is being investigated.
This is not the first time that the Sharkies have faced controversy. In 2002, the NSW Licensing Court heard a series of breaches of the Registered Clubs Act which resulted in the president, Peter Gow, being banned from holding office in any club for five years.
The court heard that Gow, father of super model Elle Macpherson, abused his presidential power in dealing with club officials and, between 1995 and 1998, tended to treat the club as if it was his own. He was dumped in 1999 after tearing up a St George fan's football jumper and punching former Saints star Barry Beath who tried to intervene.
The court heard astonishing allegations about Gow’s conduct. He allegedly drew up a memo asking a manager if the club had enough poker machines to facilitate money laundering.
On another occasion he planned to ask the same manager whether a drop in cash takings had been caused by "big players" and money launderers deserting the club. He never sent the memo.
The court revelations caused a wave of anxiety across the club industry which was anxious to protect its good name. The idea that poker machines could be used to “wash” money from illegal sources was denied by senior officials from clubland and the issue was never properly investigated by the Department of Gaming and Racing, the NSW Police Force or the NSW State Crime Commission.
According to gaming industry insiders, the money laundering scam works like this:
- A member or visitor brings up to $10,000 in cash to the registered club and enters the money into the pokie using $50 note acceptors.
- After playing a few games, he calls on a club steward to withdraw the remaining money and pay it to him on a club cheque, usually just less than $10,000 to avoid the official reporting conditions. He is then entitled to say the money is gambling winnings which, of course, is not subject to tax.
When this process is repeated hundreds of times each week in dozens of major clubs across NSW, the returns in tax-free dollars runs into millions.
There is no suggestion that this practice is occurring at either the Eels or the Sharks, but rumors persist that money laundering is still occurring at other gaming venues on a vast scale. The Labor Government seems too busy trying to outlaw bikie gangs to notice.