Australia’s Federal Court has completed proceedings against Crown Resorts for violating the Anti-Money Laundering Act (AML), awarding the land-based casino operator A$450 million (£233 million/€276 million/3). billion USD) fine.
Crown will pay out over two years, according to an agreement with the Australian Trade Reporting and Analysis Center (Austrac) in May. This has been approved by the court.
The lawsuit dates back to March 2022, when Austrak initiated civil penal proceedings against Crown over a series of allegations. These included “serious and systematic” AML and Counterterrorism Financing (CTF) failures at Crown Melbourne and Crown Perth casinos.
Crown has since admitted to operating in violation of the law Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF method).
Specific certifications included that the AML/CTF program was not based on proper risk assessments. Crown also said it lacked adequate systems and controls to manage the risk.
high-risk activities
When agreeing to settle the penalties earlier this year, Mr. Austrak said it took into account the serious nature of the violations. Austruck said this means Crown continues to allow high-risk activities within its casinos without intervention.
Examples include Crown’s continued business relationship with a major casino junket operator through 2021 despite being aware of allegations that the operator was involved in organized crime. .
Crown also failed to adequately monitor billions of dollars of transactions, including international payment flows. This has impacted its ability to identify and deter potential suspicious activity, as well as its ability to report suspicious matters, Austrak said.
Meanwhile, between March 2016 and December 2018, there were at least 75 suspicious “incidents” involving approximately $23 million in cash. These took place in Crown Melbourne’s private game room, where his one casino junket operator had exclusive access.
Ongoing collaboration with Austrac
In resolving these lawsuits, Austrak said it took into account the substantial and continuing efforts made by Crown to address the deficiencies. This led the parties to agree on a figure of $450 million for him.
Austrak Acting Chief Executive Peter Soros said he will continue to work with Crown to ensure it continues to meet its obligations.
“The casino industry, by its very nature, faces serious risks of exploitation by criminals seeking to launder the profits of illegal companies,” Soros said. “These criminals make money by harming communities by committing fraud, selling illegal drugs, and trafficking innocent people.
“The $450 million is one of the largest fines ever ordered against casinos worldwide. It is a clear warning that we must have strong AML/CTF compliance systems and processes that meet our obligations to protect our communities and their businesses from serious financial crime.
“Austrac is committed to ensuring that all regulated companies can serve as the first line of defense in the fight against financial crime. We will take enforcement action.”
drastic reform
Following the closing of the proceedings, Crown CEO Kieran Carruthers said he was pleased to close the matter. He also noted that under new ownership, Crown has sought to move beyond these historic failures.
In June 2022, Crown was acquired by private equity giant Blackstone in a deal valued at $8.87 billion.
Blackstone has received approval to operate land-based casinos in the three states where Crown operates: Victoria, New South Wales and Western Australia. Shareholders, state regulators and the Australian Federal Court have also approved the transaction. , completed the acquisition.
“Under new ownership and leadership, we have introduced a fundamental transformation as part of the FutureCrown Transformation Program,” said Carruthers. “We have invested tens of millions of dollars to strengthen financial crime compliance and incorporate global best practices into the gaming industry.
“The Crown and our community have no room for money laundering or terrorist financing.”
historic failure
Last year’s complaint from Austrak was the latest in a string of regulatory issues at Crown. October 2021Crown was found “unsuitable” to operate Crown Melbourne in Victoria following an investigation by the Royal Commission.
Crown was not stripped of its license because of the potential economic impact on Victoria, but was ordered to comply with special measures. These include his 33 recommendations made by the Commission.
The survey was conducted as a result of a New South Wales virgin survey that began in August 2019.
The investigation assessed Crown’s eligibility to obtain a casino license in Sydney and ultimately found it “unsuitable”. However, he said casinos could still be allowed to operate after the reforms were implemented.
