Crown Casinos Fined $450 Million for AML Failures

Casino operator Crown should pay a fine of $450 million for 546 violations of anti-money laundering laws by the financial crime watchdog AUSTRAC.

Crown Casinos could be hit with a half-billion-dollar fine for failing to fight terrorism financing and money laundering. It would be the largest fine ever paid by a casino globally if paid, as it also relates to breaches of counter-terrorism laws and pertains to Crown’s Melbourne and Perth casinos. A two-day hearing at Sydney’s Federal Court aimed at finding out what Crown knew was opened by Judge Michael Lee with references to the Watergate scandal.

The issue was raised internally, and by law enforcement multiple times, former executives failed to develop and implement effective programme. Monday’s proceedings focused primarily on Crown’s junket programme, which enabled operators to arrange private gambling rooms for unvetted high-wealth players.

According to the court, during the programme run between March 2016 and March 2020, junkets operated rooms and cash desks at Crown, including Macau-based SunCity. SunCity received 58 suspicious matter complaints between late 2017 and early 2018. Police made three further inquiries regarding SunCity’s cash desk during the same year.

A casino employee gave hundreds of thousands of dollars to a third person, and two people made cash deposits of $700,000 and $1.5 million. Michael Hodge KC, AUSTRAC’s lawyer, told the court: “Cash was brought into the room by unknown persons and exchanged by junket operators with other unknown persons. Cash was colourfully carried in paper bags, shoeboxes, and briefcases.”

According to Hodge, Crown’s breaches couldn’t be entirely determined due to improper monitoring. Hodge argued Crown wasn’t deliberately negligent, despite profiting from the impacted programs, and didn’t fail to perform its obligations. Justice Lee inquired, “If there wasn’t a deliberate intention to contravene the laws, then what was the reason?”

According to Hodge, it was unclear why the Crown had failed to follow the law ‘so egregiously,’ although the leadership has been primarily replaced since such violations.

Upon entering into the settlement, Crown admitted that it had failed to assess the risks related to its business and had implemented a transaction monitoring program fitting for its size. According to the court, the Crown automatically assigned a low level of money laundering risk to high-end players.

It was reported by AUSTRAC that there were 60 high-risk customers, 43 of them junket operators with a combined turnover of $69 billion, many of them deemed ‘politically influenced.’ The Crown Melbourne and Crown Perth authorities identified at least 40 of the transactions as suspicious, whilst another 38 were involved in large transactions totalling approximately $450 million.

Similarly, the Crown rated all areas being transferred into, or out of, as low-risk of money laundering based on the sources of money. In November, Crown was fined $120 million for not encouraging responsible gambling at its Melbourne casino.

After a management and board restructuring, Crown was granted only a conditional licence for its $2.2 billion Barangaroo casino in December. Nicole Rose, CEO of AUSTRAC, stated that the gambling sector carried the risk of criminals trying to wash their dirty money from drug trafficking or human trafficking. “Crown’s contraventions of the AML/CTF Act meant that a range of obviously high-risk practices, behaviours and customer relationships were allowed to continue unchecked for many years,” she said.

On Monday, there is expected to be a discussion regarding Crown’s payment plan, with AUSTRAC suggesting Crown pay $100 million upfront without interest. It was also revealed that the Crown Group’s consolidated assets totalled $5 billion, posing financial risks, and Justice Lee lashed out at the plan as “making the Commonwealth Crown’s banker.”

HM TREASURY CONSULTS UK GOVERNMENT ON AML SUPERVISION REFORMS

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