AUSTRAC, Crown Resorts Agree On AML Penalty of A$450m

May 30, 2023
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Australia’s financial transactions watchdog has asked a court to fine Blackstone Group-controlled casino operator Crown Resorts A$450m ($293m) for breaching anti-money laundering and counter-terrorism financing (AML/CTF) legislation.

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Australia’s financial transactions watchdog has asked a court to fine Blackstone Group-controlled casino operator Crown Resorts A$450m ($293m) for breaching anti-money laundering and counter-terrorism financing (AML/CTF) legislation.

After a year-long probe, AUSTRAC announced on Tuesday (May 30) that it and Crown filed joint submissions to the Federal Court in Sydney agreeing to the proposed civil penalty, together with a 133-page statement of “agreed facts and admissions” regarding Crown’s years of compliance breaches under previous management.

The pending AUSTRAC fine, as approved or amended by the Federal Court, is set to be the largest yet suffered by Crown since the unravelling of its James Packer-era ownership over a host of compliance failures.

The court is due to hear the matter at hearings on July 1o and 11.

In a statement, AUSTRAC said Crown admitted to the court that its Melbourne and Perth casinos had violated several compliance obligations by failing to assess and monitor money laundering and terrorism financing (ML/TF) risk, having no risk-based systems and controls to this end, and displaying poor board oversight.

Crown also lacked a transaction monitoring mechanism befitting a large casino operation, appropriate due diligence mechanisms for higher-risk customers and failed to impose due diligence on “a range of specific customers who presented higher money laundering risks”.

“Crown has sought to respond to the failures identified in these proceedings by enhancing its approach to ML/TF risk management and investing in its financial crime compliance,” said Nicole Rose, CEO of AUSTRAC.

“We continue to work closely with Crown to ensure that their AML/CTF program and systems are compliant and fit for purpose into the future.”

Crown apologised “for the failings of the past” in a statement.

“First and foremost, I want to reiterate that these historical failings were unacceptable, and on behalf of Crown Resorts, our new owners and leadership, I apologise for the failings of the past,” CEO Ciarán Carruthers said.

“The company that committed these unacceptable, historic breaches is far removed from the company that exists today. The Crown of today is committed to harm minimisation and becoming the world leader in the delivery of safe gambling and entertainment,” he said.

The Crown statement concluded with a lengthy list of governance and compliance reforms developed in conjunction with AUSTRAC and the government gambling regulators in the states of New South Wales, Victoria and Western Australia.

Crown has suffered a series of fines, government probes and years of dismal media coverage over misbehaviour primarily associated with its business activities in China and the fiscal and strategic handling of Chinese gamblers through junket partners.

Victoria’s gambling regulator fined Crown A$30m in April over improper customer cheque practices, following a A$120m fine in November for various breaches and a A$58m fine last May for cashcard scam activity.

The likely record-breaking AUSTRAC fine for Crown also bodes ill for The Star Entertainment Group, which AUSTRAC sued in November over “innumerable” violations of AML/CTF legislation.

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