AUSTRAC files lawsuit against Crown Resorts
Australia’s financial intelligence agency has filed a lawsuit against Crown Resorts, alleging it breached anti-money laundering and counter-terrorism finance laws and for continuing to contravene the law due to wholly inadequate oversight by management.
The Guardian reports AUSTRAC said ongoing failures to properly vet risky customers, including those brought in from overseas by junket operators and locals with links to people already banned from Crown’s Melbourne and Perth casinos, accounted for 547 breaches of anti-money laundering laws.
Each alleged breach of the law, if proven, could attract a penalty of up to $22.2 million, meaning Crown faces a fine that could theoretically exceed $12 billion.
However, if AUSTRAC’s action succeeds, a far smaller penalty is likely.
The current record fine is $1.3 billion, which Westpac agreed to pay to settle allegations by AUSTRAC that the bank breached AML/CTF laws more than 23 million times, including allowing a dozen customers to transfer money to the Philippines in a way consistent with child exploitation.
From March 2016, just 60 high-risk customers turned over $70 billion at Crown’s casinos, pumping $1.1 billion in losses into the company’s coffers, AUSTRAC said.
Filing alleges Crown failed to do appropriate due diligence
AUSTRAC alleges that Crown failed to do appropriate due diligence on these customers, which it said included junket operators and players, foreign politically exposed people – a category that can include government officials and their families, as well as people who had been arrested for money laundering or were suspected of being “connected to organised crime”.
The regulator alleges that “many engaged in large cash transactions and transacted with cash that appeared suspicious, including cash in plastic bags, shoeboxes or cardboard boxes, cash in rubber bands, small denominations of notes and counterfeit cash”.
It alleges that an additional 447 customers engaged in transactions that Crown’s external consultants later identified as typical of money laundering or terrorism finance.
Some customers allegedly engaged in multiple breaches.
The legal action follows an investigation that AUSTRAC’s chief executive, Nicole Rose, said showed that Crown failed to put in place and maintain an AML/CTF program that would mitigate the risk that its casinos were misused for money laundering.
“They also failed to carry out appropriate ongoing customer due diligence including on some very high-risk customers,” she said.
“This led to widespread and serious non-compliance over a number of years.
“AUSTRAC has taken this strong action to achieve enduring change and ensure that Crown will fully meet their obligations to protect themselves and Australia’s financial system from criminal activity.”
AUSTRAC working with Crown to ensure compliance
She said Crown was working to improve its systems, “however there is further work to do and AUSTRAC will continue to work closely with Crown to address ongoing compliance concerns”.
Crown said it was reviewing the statement of claim filed in the court by AUSTRAC.
It said it “has developed a comprehensive remediation plan which is intended to position Crown as a leader in the industry in its approach to governance, compliance, responsible gaming and the management of financial crime risk”.
“The plan is underpinned by an uplifted organisational culture.”
Allegations that Crown’s casinos were being used for money laundering were made by Nine Entertainment’s newspapers and its flagship current affairs TV show, 60 Minutes, in 2019.
Inquiries in both NSW and Victoria found that Crow facilitated money laundering at its Melbourne and Perth casino and that some junket operators were linked to organised crime.
