ASIAN GAMBLING SYNDICATE PROBED IN PNG

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By Isaac Nicholas

PORT MORESBY, Papua New Guinea (The National, Sept. 22) – An Asian syndicate operating illegal horse racing machines in Papua New Guinea is also involved in human smuggling, money laundering and tax evasion, it was revealed to the Parliamentary Public Accounts Committee yesterday.

The committee was also told that senior officers within the departments of Foreign Affairs and Immigration, Labor and Employment and Police helped this "highly organized syndicate" involving six major players from Asia.

The operators, who have threatened PNG regulators with guns and grenades, are also allegedly involved in counterfeit passports and scratch Laki lotto tickets.

The revelations shocked the PAC members, who were conducting a hearing into the affairs of the National Gaming Control Board, and the operations of horse racing machines in PNG.

The charges were made by Gaming Board Chairman Nat Koleala and Internal Revenue Commissioner David Sode.

The two men told the committee that these illegal activities placed the economy and national security of the country at great risk.

Those at the hearing include PAC chairman John Hickey, and members Dr Allan Marat, Dr Bob Danaya, Ekis Ropenu, Tony Aimo, Arthur Somare, Michael Mas Kal and John Vulupindi.

Testifying before the committee, Mr Koleala said the Gaming Board had instituted legal proceedings against eight operators of the horse racing machines in order to ban them, and it was costing them over K500,000.

Mr Koleala said one operator, Econ Trading, had also started legal proceedings against the State, seeking damages of more than K8 million (US$2.4 million) for loss of business after police confiscated their machines.

He said a stay order had been issued by the National Court that was granted on April 23 this year for the operators not to operate the machines commercially, but this has been ignored.

Mr Koleala said that during the court saga relating to these machines, the board had received five bomb threats at its town office, and in another incident, a hand grenade was hurled from a moving vehicle and exploded outside the residence of the Gaming Board registrar Joe Krammer.

He also told the PAC inquiry that a Gaming Board driver had a pistol pointed to his head by an operator while on surveillance duties and the charges against this operator was dropped by police because they could not remember the serial number of the pistol.

The IRC’s Mr Sode, who also testified, said his organization was doing its own investigations into tax evasion, transfer pricing and money laundering by these operators.

"Money leaving the country can be done in many ways. Most of the horse racing machine operators operate legitimate businesses as a front, and use these to siphon the proceeds of their illegal operations elsewhere," he said.

He said only last week, seven people of Asian origin were arrested for trying to illegally move a container containing horse racing machine parts from the wharf.

"In earlier days, the horse racing machines were brought in whole, now they have switch to manufacturing the boards here using PNG timber and brought in parts by people using tourist visas with one way tickets," he said.

Mr Sode said one such Chinese tourist was arrested at the airport who came in with a one way ticket and five suitcases containing nothing but electronic boards for the horse racing machines.

"This is a highly organized syndicate which through our investigations, have recognized six main players from Asia," Mr Sode said.

He said IRC in its investigation also uncovered counterfeit Laki Lotto scratch cards that were printed in China and brought into the country.

Mr Sode also told the inquiry that recently a counterfeit PNG passport was found in Canada, which they believed was produced in China or Hong Kong.

September 23, 2004

The National: www.thenational.com.pg/

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