Crown Resorts agrees to $450m in AUSTRAC penalties for ‘historic failings’

Melbourne and Perth casino operator Crown Resorts has agreed to pay a massive $450 million civil penalty after reaching an agreement with Australian financial crime watchdog AUSTRAC in relation to what it describes as ‘years of high-risk practices’ that were allowed to continue unchecked by the company.

While Crown’s two Australian casinos have filed a joint submission with AUSTRAC with the Federal Court over the company’s breaches of anti-money laundering and counter-terrorism laws (AML/CTF), the penalty is ultimately up to the court to decide at a hearing set down for 10-11 July 2023.

Crown, which has already faced fines of at least $230 million including a recent $30 million hit from the Victorian Gambling and Casino Control Commission (VGCCC), has made several admissions in agreeing to the penalty including that its casino properties:

• Failed to appropriately assess the money laundering and terrorism financing risks they faced, and to identify and respond to changes in risk over time.
• Did not have appropriate risk-based systems and controls in their AML/CTF programs to mitigate and manage the money laundering and terrorism financing risks they faced.
• Had an enhanced customer due diligence program that lacked appropriate procedures to ensure higher risk customers were subjected to extra scrutiny.
• Did not conduct appropriate ongoing customer due diligence on a range of specific customers who presented higher money laundering risks.

Crown Resorts CEO Ciarán Carruthers has apologised for Crown’s ‘historical failings’, saying they were ‘unacceptable’.

“Today marks a significant step in the process and we are pleased to have reached this agreement with AUSTRAC, noting that it is still subject to consideration and approval by the Federal Court and we await that decision,” he says.

“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.”

A statement from AUSTRAC announcing the agreed penalty warns that the casino sector is ‘at risk of exploitation by organised criminals seeking to clean their dirty money, money which criminals make through the sale of illicit drugs, scams and even 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,” AUSTRAC’s CEO Nicole Rose says.

“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.

“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.”

AUSTRAC says as the matter is now before the court it is not able to comment further on the proceedings or the agreement with Crown.

Crown, which was acquired by US private equity group Blackstone via an $8.9 billion takeover last year, says it is focused on Future Crown, the company’s multi-year transformation program to reform the company and its practices.

Carruthers says the company has introduced ‘sweeping reforms’ since making a commitment in October 2020 to ‘strengthen our systems and processes in regulatory compliance to embed global best practice for the gaming sector’.

“We take seriously the responsibility we have to the community, to law enforcement, to our industry and stakeholders to ensure that we continue to comply with our AML/CTF obligations,” Carruthers says.

“There is no place for money laundering or terrorism financing at Crown or anywhere within our communities, and we will continue to invest in developing a sophisticated and robust framework, supported by the right capabilities to combat this illegal behaviour.

“We are committed to implementing these reforms to make Crown a better business and lift the standards for the entire industry.”