Austrac Takes Crown Resorts to Federal Court

Crown Resorts may never stop paying for its failings. Since well-respected media outlets exposed said failings in mid-2019, the company has dealt with everything from royal commissions to lawsuits, investigations, and even a corporate takeover. This month, one of the many things facing Crown is a lawsuit from AUSTRAC. Crown attorneys are still working on a response to the initiation of those federal proceedings.

AUSTRAC Authority

From the beginning of the reports that Crown Resorts failed in preventing money laundering and numerous other crimes, AUSTRAC has been involved. Some of its job was to watch for the results of investigative commissions, three of which (NSW, Victoria, and WA) are now in the public sphere.

AUSTRAC stands for Australian Transaction Reports and Analysis Centre. It is an arm of the Australian government that monitors financial transactions for criminal activity, from money laundering to tax evasion and terrorism.

How does it do that? There are a variety of ways that AUSTRAC monitors transactions and affects change. The financial intelligence derived from the information it collects allows AUSTRAC to help shape laws and regulations. This helps keep laws current and effective. In addition, it works tightly with law enforcement agencies to help stop and prevent crime.

It only makes sense that the agency took a particular interest in Crown Resorts and all of the investigations and commissions investigating it.

Civil Proceedings

At the beginning of March 2022, AUSTRAC commenced civil penalty proceedings against Crown Melbourne and Crown Perth (operated by Burswood Nominees Limited). The allegation is that the casinos failed to uphold its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006.

AUSTRAC said that it started its own investigation in October 2020. It also noted that both Crown properties have fully cooperated. Crown also indicated in some of its corporate financial reports that it anticipated this type of lawsuit from AUSTRAC.

Reasons for Civil Actions

The AUSTRAC announcement said that the action follows “proactive compliance work with the casino sector.” Since Crown failed to meet its AML/CRF obligations, though, the actions are necessary. It needs to know that its failings made Australia’s entire financial system vulnerable to criminal exploitation.

AUSTRAC CEO Nicole Rose said that its investigations found that Crown exhibited poor governance and risk management processes. The company’s lack of a proper AML/CTF program – and incompliance with anything of the sort – was an utter failure.

In addition, the agency accuses Crown of lacking customer due diligence, especially with regard to high-risk customers. The non-compliance with laws and regulations went on for years.

Rose said, “AUSTRAC has taken 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.”

Specific Accusations

AUSTRAC didn’t hold back in its listing of allegations against Crown Melbourne and Crown Perth. An abbreviated list includes the following:

  • Failure to appropriately assess money laundering and terrorism financing risks
  • Failure to establish proper oversight for AML/CTF programs by board and senior management
  • Didn’t include proper systems and controls to mitigate and manage risks
  • Didn’t use a transaction monitoring system to identify suspicious activities
  • Failure to conduct ongoing customer due diligence with a proper program

The announcement of the civil proceedings against Crown indicated its message to other casinos across Australia. Rose said it is a reminder to them to “have a strong anti-money laundering program in place to protect their business and the community from serious and organized crime.”

Acknowledged Change

In the Crown’s official reaction notice to the move, it emphasized that it is already undergoing serious changes. It wanted to acknowledge the following improvements:

  • Creating an uplifted organizational culture
  • Complying with financial crime obligations by overhauling its approach to managing risks
  • Establishing a comprehensive Financial Crime & Compliance Change Program
  • Implementing programs like a revised Joint AML/CTF (anti money-laundering/ counter-terrorist financing) Program to address potential risks
  • Establishing improved controls to prevent and detect money laundering via its bank accounts
  • Enhancing controls and reducing limits of cash deposits at its casinos
  • Increasing Financial Crime and Compliance resourcing and capability
  • Investing in automation for electronic monitoring of Unusual Activity Reports
  • Completing a forensic audit and controls assessment of its patron bank accounts by an independent expert

AUSTRAC admits that Crown is working on changes due to provincial commissions that found dire inadequacies at the company. The company wants to show its compliance with regard to everything from responsible gaming to financial crime risk management. But AUSTRAC will continue with its lawsuit to ensure that they do. And it will hold other companies of all types accountable.

 

Rose Varrelli avatar
Rose Varrelli
Senior Casino & News Writer

Hi there! I’m Rose, and with nine years behind me in the iGaming industry, I craft engaging narratives at CasinoAus. My education in Communication across Europe has sharpened my skills in fintech, casino legislation, and digital marketing. Backed by a strong foundation in SEO, storytelling, and cross-cultural communication, I’m passionate about creating content that resonates globally and educates our audience.

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