The Australian Transaction Reports and Analysis Centre has begun federal court proceedings against Star Entertainment for alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
The country’s financial watchdog says that an absence of risk-based controls meant that the group was vulnerable to criminal exploitation, with a perceived failure to manage ML/TF risks also exposing more widespread threats “over many years”. Any potential financial penalty is to be determined by the court.
This action stems from a compliance campaign that began in September 2019, which subsequently commenced an enforcement investigation into Star as well as Crown Resorts and SkyCity Entertainment.
Robbie Cooke, The Star’s Managing Director and CEO, said: “We are transforming our culture, transforming our business. We are committed to improvement but there is a lot still to do.
“Our goal is to earn back the trust and confidence of AUSTRAC and all our regulators. We will continue to work with AUSTRAC as we build a better, stronger and more sustainable company.”
Among an extensive list of AUSTRAC allegations are that Star failed to appropriately assess the money laundering and terrorism financing (ML/TF) risks they faced, as well as not ensuring sufficient systems and controls to mitigate and manage such danger.
Furthermore, a failure to to establish an appropriate framework for board and senior management oversight of the AML/CTF programs was also shared.
Star is also deemed to have not had a not had a transaction monitoring program to monitor transactions and identify suspicious activity or had an appropriate enhanced customer due diligence program. It was also said that the group did not conduct appropriate ongoing customer due diligence on a range of customers that presented higher money laundering risks.
“Criminals will always seek to exploit the financial system to launder their money and harm the community. Businesses, as the front line of defence of our financial system and our communities, are often the first to be alerted to criminal activity,” commented Nicola Rose, AUSTRAC CEO.
“AUSTRAC’s investigation identified a multitude of issues including poor governance and failures of risk management and to have and maintain a compliant AML/CTF program.
“The Star Entities also failed to carry out appropriate ongoing customer due diligence which has led to widespread and serious non-compliance over a number of years.”
As a result of the aforementioned perceived failures, AUSTRAC added that the company permitted customers to move money through payment channels that were non-transparent and involved high ML/TF risks, did not understand the sources of money moving through these channels and failed to consider whether it was appropriate that they continue an ongoing business relationship with higher risk customers.
Rose noted that the lack of appropriate controls and processes prevented the Star entities from appropriately managing high risk customers. These failings are said to have facilitated the movement of money in non-transparent ways, which therefore made the firm vulnerable to criminal exploitation.
“AUSTRAC continues to work with the Star Entities to ensure they comply with their obligations under the law, including having appropriate systems, controls and governance in place, and reporting quality financial information and suspicious matter reports to AUSTRAC,” she added.
