Casino operator Crown could be forced to fork out almost half a billion dollars for failing to guard against money laundering and terrorism financing at its Melbourne and Perth casinos.
The financial crime watchdog AUSTRAC and Crown jointly filed in the Federal Court that the casino operator should pay a $450 million penalty for 546 breaches of anti-money laundering laws.
If paid, the fee – which also relates to breaches in counter-terrorism laws – would be the largest fine paid by a casino globally, and relates to operations at Crown’s Melbourne and Perth casinos.
On the first day of a two-day hearing at Sydney‘s Federal Court, Judge Michael Lee recalled the Watergate scandal in seeking to understand who at Crown ‘knew what and when they knew it’.
The court heard that the casinos’ former leadership had failed to implement and oversee effective programs despite issues being raised from within the company, and by police, on multiple occasions.
Crown has agreed to pay a $450 million penalty for 546 breaches of anti-money laundering laws (pictured, Melbourne’s Crown Casino Towers)
Of particular focus during Monday’s proceedings were Crown’s junket programs, which allowed the casinos’ operators to facilitate gambling by unvetted high-wealth players in private gambling rooms.
The court learned that throughout the program, which ran between March 2016-March, 2020, junkets including Macau-based SunCity ran rooms inside Crown, as well as their own cash desks.
From late-2017 to early-2018, the SunCity room received as many as 58 suspicious matter complaints, with police making a further three inquiries later that same year in regard to SunCity’s cash desk.
Police investigated claims two people had made cash deposits of about $700,000 and $1.5 million, and that an employee had handed a third person hundreds of thousands of dollars in the casino’s parking lot.
AUSTRAC’s lawyer Michael Hodge KC told the court that: ‘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.’
Mr Hodge told the court it was impossible to determine the full extent of Crown’s breaches, owing in part to the fact that improper monitoring impeded accurate documentation and record-keeping.
Justice Lee called into question submissions by Mr Hodge that Crown had not deliberately failed in its obligations and had done so by negligence, despite profiting from impacted programs.
‘If there wasn’t a deliberate intention to contravene the laws, then what was the reason?’ Justice Lee asked.
‘People just didn’t understand? What am I supposed to take as the reason?’
In response, Mr Hodge said it had not been agreed upon why Crown had ‘so egregiously failed’ to comply with the laws only that they had not deliberately done so, with the leadership now largely replaced.
Nonetheless, Justice Michael Lee said he was hesitant to label the vast changes to Crown’s leadership and Crown’s board and leadership team – as well as the cessation of junkets – as being evidence of contrition.
The casino operator was found to have failed to guard against money laundering and terrorism financing at its Melbourne and Perth casinos
If Crown pays the fee set out by financial crime watchdog AUSTRAC, it would be the largest fine ever paid by a casino globally
‘One can draw conclusions from the fact it was in Crown’s interest to encourage this sought of activity, and the extent of the turn over it facilitated,’ Justice Lee said.
‘Contrition means more than saying sorry when you get caught. It means a state of mind in people who have done wrong to play with a straight bat in the future.
‘It is not people who have done wrong being wept out, and there are new people there.’
As part of the settlement, Crown admitted that it breached laws by failing to assess the risks it faced, and it implements a transaction monitoring program appropriate for the size of its business.
The court heard that on top of its inadequate programs, Crown automatically rated players, including high-wealth spenders, as being of a low-risk of money laundering or criminal activities.
At least 60 high-risk customers were highlighted by AUSTRAC, 43 of whom were junket operators – many classified as ‘politically influenced people’, whose combined turnover was $69 billion.
At least 40 had been identified as being suspicious by either Crown Melbourne or Crown Perth, while $38 were involved in the transfer of large sums of money totalling approximately $450 million.
A similar approach was also taken by Crown to jurisdictions from which money was being transferred into, or out of, with all areas automatically rated as being at a low risk of money laundering.
The penalty comes after Crown was slapped with a further $120 million fine in November for failing to encourage responsible gambling at its Melbourne casino.
The Victorian Gambling and Casino Control Commission also fined Crown Melbourne $80 million last May for allowing patrons to use credit or debit cards to access funds.
At least 60 high-risk customers were highlighted by AUSTRAC, 43 of whom were junket operators (pictured, Crown Perth)
The fines come amid a renewed focus by government agencies on casino and gambling operations, with inquiries in three states ruling Crown unfit to hold a casino license.
According to the AFR, Crown was issued only a conditional license expiring in December to operate its $2.2 billion Barangaroo casino after an overhaul of its board and management.
In a statement, AUSTRAC CEO Nicole Rose said the casino sector was at risk of exploitation by organised criminals seeking to clean their dirty money from drug sales 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.
The hearing will resume on Monday where issues around a payment plan for Crown are expected to be discussed, with AUSTRAC proposing Crown pay just $125 million upfront with no interest.
Justice Lee lambasted the plan as ‘making the Commonwealth Crown’s banker’, with the court also learning the consolidated assets of the Crown Group currently totalled $5 billion, posing risks of financial strain.
DailyMail
