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The only place in China where its legal to put on a bet in a casino. As the high rollers poured in from the mainland, Macau became the richest, glitziest gambling den in the world.

It also became, a massive money laundry. I've been in Asia forty years, I've never seen anything on the scale as this sort of purge on a very large scale.

As Crown's principal shareholder, Packer confidently backed the strategy at every opportunity. One of Australia's top public companies is now collateral damage in China's corruption crackdown.

If ah if you were caught, we'll make an example of you. It was a stunning police action against a foreign company in China.

The raids were carefully planned and terrifying. And the scenes that were described to me by family members that were present were quite remarkable.

They described ah teams of ah six or seven plain clothed ah police officers knocking on the door after midnight, um bursting through after the door was opened.

And um basically they said it felt like they were um suspects of a murder investigation or a drug bust. You know, that was just how sudden and forceful the raids were.

Pretty shortly after that they were, starting to basically confiscate or seize all these communications equipments, including laptops, computers, you know iPads, hard disk drives.

Fifteen Crown staff and a number of associates, were taken into custody. He was tipped off about the raids by local staff and made a dash for the airport.

But he was never ah, never able to board the plane. But Crown could do nothing to stop Chinese police taking its staff, including O'Connor, to a Shanghai detention centre for questioning.

You know this sense of humiliation, defeat, um shock ah ma- is maximised in this way so that when they start getting interrogated again the following day they're in a state of breakdown already.

Humphrey and his wife were thrown into a Shanghai detention centre three years ago when they were swept up in a Chinese investigation into a British company.

Many of them would have been thrown into a cell like that in the middle of the night just like I was. So they'll be led out of their cell, put in handcuffs, they're forced to squat when they exit the cell; you have to squat in front of the officers.

They'll be led down a corridor and across a a rusty sort of iron bridge which connects two wings of the building into the interrogation block and in that block there are interrogation cells and the typical cell has a small rostrum at one side under the window and it has a a metal cage in the middle.

This cage is made of steel. You know it's it's a silvery steel cage, inside the cage is an iron chair with a bar that locks across your lap so what will happen to these prisoners is that they'll be taken into that cage, put in that cage, they'll be locked in that chair, they'll also have the handcuffs on, they'll be sitting like that and then there'll be two or three policemen PSB men up on that rostrum.

One of them will be typing on a laptop, another may be receiving guidance and instructions through an earpiece from someone who you never see so they'll be questioned ah in that particularly in that style, locked in a cage, guys up on the rostrum um no lawyer present.

Um that is all intended to make you crumple um and confess because you you know y-you're left to think of that the only way out of here is by confessing.

They are being looked after and they are in good health. There have been reports that it is related to gambling, the casinos evidently, but beyond that we don't have any specific details.

I advise you to check with the Shanghai police for further details about the investigation,the activities have they been involved in, and their current condition.

But I think gambling is illegal in China. It's also illegal to promote gambling or arrange for more than ten people to travel to a foreign casino to gamble.

But in the chase to woo rich Chinese gamblers or VIPs, many foreign casinos like Crown have been side stepping this law. They say their staff in China are not promoting gambling, they're promoting tourism in their luxury hotel resorts in Australia, the US and Macau.

They're there to promote the resort, the end destination um however, once that individual person is within China they are ensconced in a room, private room with a target client ah have no doubt, that the topic is when would you like to come to ah our casino, how much would you like to play and ah do we need to give you credit in order to encourage you to come and play.

But lawyers for some of Crown's minority shareholders seeking to launch a class action, claim the company knew its marketing in China was highly risky and failed to disclose this to the market.

Ah now ah gambling itself and also the marketing of gambling is illegal as we understand it in mainland China so what we understand is that ah there was a risk of Chinese law enforcement er that might flow from Crown's attempts to lure ah Chinese VIPs to its casinos in Australia.

They were managed by Ho's company. They were pitched to wealthy Chinese men on the mainland. By , Macau was booming and Melco Crown's profits soaring.

Packer was convinced Crown was on a winning streak and bet the future of the company on Chinese VIP gamblers. And Melco Crown driven by a surging Chinese tourist market is continuing to expand in Macau and now throughout Asia, with major investments in new hotels and attractions.

ANDREW SCOTT: It was interesting we had a decade, um, of twenty percent on average, year on year growth so when that happens as a businessman you tend to feel like God so you just keep, you know, it was just happy days, everything was booming.

These are private rooms in the casinos. Here wealthy Chinese gamblers can discretely bet a fortune in Hong Kong dollars on a hand of baccarat.

Ah but that's just a minimum bet. Tony Tong is a lobbyist for the Macau junket operators and they are crucial to success of a big casino. TONY TONG: So they need to have a relationship with a junket agent, ah who is responsible for ah you know serving, taking care of the ah VIP customer, and arranging the trip, ah making all the ah logistic arrangements, visa applications, hotel reservation.

Sometimes private jets and entertainment activities. It's a fraught business because it's illegal to enforce gambling debts in mainland China.

TONY TONG: So ah they have to go through other means, ah which means ah basically ah making life difficult for the debtor, ah basically following the debtor and going to his company.

Basically starts with more you know telephone calls and reminder calls. If you still don't get paid then you have to show up at the doorstep ah at his home or his business.

And then ah, and hopefully you'll get some more progress. So ah normally every time when you send people to show up, normally they have ah something to collect.

Has there been violence? There are often cases in Macau, Hong Kong, even in mainland China that ah involves violence. Sometimes the collectors have to ah try to, in order to recover ah the debt, ah they have to go through pretty extreme means.

Normally from what I heard, if you really do something bad it could harm your business, it could harm your chance to ah collect. I think it is the threat, the threat of violence that is more important than the violence itself.

He admits some junket operators have very dubious connections. Kidnapping, ransom is always a means of getting paid. So ah yes ah very unpleasant ah tactics.

Hong Kong Triad gangs held sway here in the s before China reclaimed the territory from the Portuguese. Police intelligence reports in the US and Hong Kong say Triad members still have links to some of Macau's big junket operators.

Because who's going to enforce a debt on the mainland? It's illegal to enforce that so what can ah there's no, there's no legal manner to reach into mainland China and enforce a debt so that's what they do.

They can raise capital and move money. So triads remain associated with ah with junkets. He believes the casino owners know about the Triad links to some junkets.

One was the Neptune junket, which was publicly exposed for its triad connections three years ago.

The Hong Kong courts have heard some extraordinary cases linking junket operators, money laundering and triads. But perhaps the most sensational was the case of the Hong Kong hair dresser who ended up owner of the British Football Club, Birmingham City.

He'd been a huge gambler in the VIP rooms at a Macau casino. Hong Kong barrister, Kevin Egan, was part of that case and saw the evidence linking the Neptune group, with an alleged top Triad member.

He ran it along with two others. And [ahem] he is alleged to have very serious triad connections, but he's never been charged with or convicted of triad offences.

But if you ask anyone from the Organised Crime and Triad Bureau of the Hong Kong Police Force what his status was, they would say 'senior office bearer in a triad society'.

But the big loser was China. Casinos became one of the conduits for huge amounts of capital to exit China in underground money flows.

Corrupt Chinese officials and businessmen were using the VIP rooms to not only gamble ill gotten gains, but move money offshore. The harsh reality was because of the junket activity, the illicit side betting that was going on, you could probably multiply that by six.

So that's a scale of um you know south, just a little south of billion US dollars a year…so as a matter of economic national security, they need to crack down on those capital outflows.

That's why it's a really serious issues. And Packer drove it from the top. It won enthusiastic backing from the NSW Premier. And yes part of that proposal would be for this Asian high rollers room.

This will be a VIP only gaming facility. There will not be poker machines. The former head of the state casino regulator believes that was a mistake.

I think that casinos are big money spinners and operating a casino in most circumstances is like a license to print money. For that reason we need to know firstly that there is public interest or public benefit in having an additional casino in the first place.

The parliamentary scrutiny was fast and it was to my mind relatively superficial. I don't think there was an appetite for thorough scrutiny, I think there was a wish simply to get the job done in terms of um having some basic level of examination and ah doing the deal.

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