One of New Zealand's largest banks is being sued after a fraudster cashed cheques for tens of thousands of dollars at a branch inside SkyCity casino without red flags being raised.
The High Court civil case comes after a Department of Internal Affairs report highlighted concerns that cash machines in the casino gave punters "unlimited access" to cash, which could exacerbate problem gambling.
The Bank of New Zealand's casino branch is open for up to 15 hours a day, seven days a week, and has been labelled "socially questionable" by an anti-gambling watchdog.
Both BNZ and SkyCity say the branch, based in the lobby with three tellers and private rooms, caters mainly to tourists; its principal activity is exchanging foreign currency.
The Herald can reveal that at least three convicted fraudsters - who were VIP guests at the casino - withdrew millions of dollars from the branch or cash machines inside the building.
One of those was Herminia Lanuza, who stole more than $2.7 million from a company she worked for and gambled the cash in the high rollers' lounge.
Over a six-year period, Lanuza wrote out multiple fraudulent cheques worth $784,363 drawn on the account of her employer, many of which were cashed at the BNZ casino branch.
A single cheque for $30,100 was cashed one minute after the bank opened at 9am. Lanuza also took $123,375 from the company's account using withdrawal and transfer slips at the casino branch.
She had no authority to carry out the transactions, according to the police summary of facts.
"Many of them were done well after normal business hours and these have to have had a connection with Lanuza's gambling at SkyCity."
Lanuza and her partner, Divinia Granados, lost more than $1 million at SkyCity and Lanuza spent the equivalent of 306 full days there between June 2002 and March 2008.
In October 2010, she was sentenced to 4 years in jail.
The firm she ripped off has now launched a civil case against the BNZ in the High Court at Auckland.
Both parties have objected to the Herald seeing the court file. But the legal battle comes after Internal Affairs raised concerns over similar cases at the casino.
Documents obtained under the Official Information Act show officials wrote a report that SkyCity patrons effectively have "unlimited access" to cash from numerous ATMs throughout the casino and the BNZ branch.
"This unlimited access to cash is thought to exacerbate problem gambling," according to the Internal Affairs memo dated July 2011.
It sets out examples where officials questioned or investigated SkyCity about compliance with the Gambling Act.
Concerns over the BNZ and cash machines inside the casino were first raised after a Serious Fraud Office investigation into a VIP gambler who stole $2.8 million from his employer.
Christopher Sue was an accountant for Turners Auctions and was jailed for 4 years in 2008.
Sue used most of the money to feed his gambling habit as he was a frequent visitor to the high rollers' lounge, where he had a loyalty card.
"Between 2000 and 2006, [Sue] withdrew more than $2,459,800 from various ATMs throughout the casino and also the [BNZ] bank located in the casino building," the Internal Affairs memo said.
A third convicted fraudster, Richard Arthur Watson, stole $5.5 million from his employer over 10 years. He withdrew most of that cash from ATMs and had a turnover of $50 million at the casino during that time.
A BNZ spokeswoman said the bank would not comment on the civil court action.
The bank had not seen the Internal Affairs report and was therefore unable to comment on it.
However, she said the SkyCity branch operated under a high standard of systems with robust processes.
"[The branch] largely caters to the tourist market, with its main activity being in foreign exchange.
"BNZ has a longstanding contract with SkyCity and our hours of operation are part of that agreement. Of the seven ATMs in the casino foyer, only two are BNZ's and these have a daily cash limit in place."
When BNZ had an opportunity to view the report it would reflect carefully and soberly on its contents.
The bank at all times did its best to act responsibly, and was "keenly aware" of the issue of problem gambling.
Grainne Troute, SkyCity's general manager of group services, said there were 13 ATMs on site, and the BNZ leases a retail space and sets its own opening hours.
"The presence of these facilities reflects the fact that we are a tourism hub in the city centre and guests and tourists need access to banking and currency-exchange facilities."
Problem Gambling Foundation chief executive Graeme Ramsey labelled the BNZ branch and its opening hours "socially questionable".
"If the bank was concerned about problem gambling, then I'd think they would want to question those hours," Mr Ramsey said.
The ready availability of cash at a casino enabled gamblers to chase losses and was a key determinant in managing problem gambling.
"Sit by an ATM in the casino for a short period of time and you will get a good understanding of what the issue is," Mr Ramsey said.
"People come back again and again, checking their balances, looking to how they can get more cash out."By Jared Savage @jaredsavageNZH Email Jared, Nicholas Jones Email Nicholas