A A$450m financial penalty has been imposed on Crown Resorts by the Federal Court of Australia after AUSTRAC filed civil proceedings for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.
This latest run-in for the operator, the financial regulator said, will serve as “a clear warning” that Australian businesses must possess strong AML and CTF compliance systems and processes.
The order, imposed on Crown’s Melbourne and Perth properties, comes after a joint filing in May for the payment of the aforementioned amount in instalments over two years. The company must also pay costs.
As part of the settlement, Crown admitted that it operated in contravention of the AML/CTF Act, including that the AML/CTF programs at the venues in question were not based on appropriate risk assessments.
Furthermore, the company also did not have appropriate systems and controls to manage their risks, and were not subject to appropriate oversight by their boards and senior management.
Ciarán Carruthers, Crown Resorts CEO, is hopeful that the Federal Court judgement brings to an end the historical failures.
“There is no place for money laundering or terrorism financing at Crown or in our communities”Ciarán Carruthers, Crown Resorts CEO
“Under new ownership and leadership, we have introduced sweeping reforms as part of our ‘Future Crown’ transformation program and invested tens of millions to bolster financial crime compliance and embed global best practice for the gaming sector,” he said.
“There is no place for money laundering or terrorism financing at Crown or in our communities.”
In calcualting an appropriate settlement, AUSTRAC noted that it took into account the “substantial and ongoing efforts” undertaken by the group to address the AML/CTF failings.
“AUSTRAC continues to work collaboratively with Crown and our regulated businesses to support them in meeting their obligations to ensure they are equipped to help to protect Australia’s financial system from criminal threats,” Peter Soros, AUSTRAC CEO, noted.
Among the shortcomings identified in the AUSTRAC investigation was that Crown maintained a business relationship with a junket operator despite being aware of alleged links to organised crime.
The company was also said to have failed to appropriately monitor billions of dollars in transactions that impacted its ability to identify and disrupt possible suspicious activity, as well as reporting these to AUSTRAC and law enforcement.
In addition, at least 75 suspicious ‘incidents’ involving a total of around A$23m in cash were also identified from March 2016 to December 2018. These stemmed from a private gaming room which Crown Melbourne is said to have given one casino junket operator exclusive access to.
“$450m is one of the largest penalties ever ordered against a casino globally”Peter Soros, AUSTRAC CEO
Soros added the outcome is not only intended to send a strong message to Crown, but also to the wider gaming industry regarding AML and CTF obligations.
“The casino industry by its very nature, faces serious risks of exploitation by criminals seeking to launder the profits of their illicit enterprises,” he commented.
“These criminals are making their money by harming the community, whether by running scams, selling illicit drugs or trafficking innocent people.
“$450m is one of the largest penalties ever ordered against a casino globally. It serves as a clear warning to anyone who provides casino or gaming services in Australia that they must have strong AML/CTF compliance systems and processes that meet their obligations, to protect the Australian community and their businesses from serious financial crime
“AUSTRAC is committed to ensuring all regulated businesses, as our first line of defence, do their part in the fight against financial crime and will not hesitate to take enforcement action when serious failings are identified.”
Last year, Crown, which saw a long protracted A$8.9bn (US$6.3bn) takeover by Blackstone become finalised, received a pair of financial penalties in Victoria that were handed down amid a slew of investigations into the group in recent times.
In November, Crown Resorts’ Melbourne venue received a mammoth A$120m in fines from the Victorian Gambling and Casino Control Commission.
This became the second such action brought against the company by the regulator following the state’s royal commission into the group, with the financial penalty taking the company’s Victorian total to $200m. One year earlier, the VGCCC fined Crown A$80m over its China Union Pay process.
Last month, Crown Melbourne has accepted an AUS$20m fine from the Victorian Gambling and Casino Control Commission for breaching casino tax obligations.