Australia’s corporate watchdog has commenced civil penalty proceedings in the Federal Court against Crown Resorts’ (ASX: CWN) Melbourne and Perth businesses for alleged non-compliance with anti-money laundering and counter-terrorism financing (AML/CTF) laws.
AUSTRAC says the action follows proactive compliance work with the casino sector, which led to a number of detailed enforcement investigations into Crown Melbourne and Crown Perth’s compliance.
It also comes after Royal Commissions in both Victoria and Western Australian into the operations of Crown Resorts - the former determining the parent company engaged in “illegal, dishonest, unethical and exploitative” conduct, while the latter is expected to hand down its final report this month.
AUSTRAC CEO Nicole Rose said Crown failed to meet its AML/CTF obligations, making the business and Australia’s financial system vulnerable to criminal exploitation.
“AUSTRAC’s investigation identified poor governance, risk management and failures to have and maintain a compliant AML/CTF program detailing how Crown would identify, mitigate and manage the risk of their products and services being misused for money laundering or terrorism financing,” Rose said.
“They also failed to carry out appropriate ongoing customer due diligence including on some very high risk customers. This led to widespread and serious non-compliance over a number of years.
“AUSTRAC has taken this strong action to achieve enduring change and ensure that Crown will fully meet their obligations to protect themselves and Australia’s financial system from criminal activity.”
AUSTRAC alleges that Crown Melbourne and Crown Perth:
- Failed to appropriately assess the money laundering and terrorism financing risks they faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time.
- Did not include in their AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to which Crown were reasonably exposed.
- Failed to establish an appropriate framework for Board and senior management oversight of the AML/CTF programs.
- Did not have a transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of Crown.
- Did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers.
- Did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks.
Rose said the absence of proper controls and processes meant Crown was unable to appropriately manage high risk customers, allowing the movement of money in non-transparent ways which in turn made Crown vulnerable to criminal exploitation.
“This is an important reminder to all casinos in Australia that they must have a strong anti-money laundering program in place to protect their business and the community from serious and organised crime.”
“Crown is taking steps towards improving its systems, processes and resourcing however there is further work to do and AUSTRAC will continue to work closely with Crown to address ongoing compliance concerns.”
In a statement, CWN said it had previously disclosed in its 2021 Annual Report and 2022 half year results that it "considered AUSTRAC's investigation was very likely to result in civil penalty proceedings being commenced against Crown Melbourne and Crown Perth".
"Crown has developed a comprehensive remediation plan which is intended to position Crown as a leader in the industry in its approach to governance, compliance, responsible gaming and the management of financial crime risk. The plan is underpinned by an uplifted organisational culture. Crown recognises the importance of complying with its financial crime obligations and has overhauled its approach to managing financial crime risk," Crown said.
"Crown is currently reviewing AUSTRAC's statement of claim."
This action is AUSTRAC’s latest against an Australian casino operator, and follows money laundering probes into SkyCity Adelaide and Star Sydney launched last year.
Like the allegations made against Crown, AUSTRAC’s investigations into SkyCity and Star are to do with “potential serious non-compliance” with AML/CTF rules.
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