Legal action follows compliance work with the casino sector, which Austrac said led to a number of detailed enforcement investigations including into compliance of the Crown Melbourne and Crown Perth properties.
Austrac’s allegations include that the two properties 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.
Crown Melbourne and Crown Perth were also found to have not included in their AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to Crown.
Austrac also said the properties did not establish an appropriate framework for board and senior management oversight of the AML/CTF programs, nor did they have a transaction monitoring program to help identify suspicious activity that was risk-based or appropriate to the nature, size and complexity of Crown.
Other alleged failings included that the properties did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers, nor did they conduct appropriate ongoing customer due diligence on a players who presented higher money laundering risks.
“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,” Austrac chief executive Nicole 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.”
Rose also said the absence of appropriate controls and processes meant Crown was unable to appropriately manage high risk customers, which in turn allowed the movement of money in non-transparent ways, making 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,” Rose said.
Austrac said it would not provide further comment on the action or details provided in the court documents now the matter is before the court, adding that whether a civil penalty order is made, and what this could amount, are matters for the court.
Responding to the case, Crown said it had developed a comprehensive remediation plan intended to position the group as a “leader” in the industry in its approach to governance, compliance, responsible gaming and the management of financial crime risk.
These actions included establishing a comprehensive Financial Crime & Compliance Change Program and implementing new controls to manage the risk of financial crime, including a revised Joint AML/CTF program.
Other activity included introducing improved controls to prevent and detect money laundering through Crown’s bank accounts and reduced limits for cash deposits at its casinos, as well as increasing its Financial Crime and Compliance resourcing and capability.
Crown also noted it had invested in automation, specifically a new automated transaction monitoring system and digitised tool to allow electronic submission and investigation of unusual activity reports, while a forensic audit and controls assessment of Crown’s patron bank accounts was carried out by an independent consultant.
“The plan is underpinned by an uplifted organisational culture,” Crown said. “Crown recognises the importance of complying with its financial crime obligations and has overhauled its approach to managing financial crime risk.”
Rose acknowledged these efforts, saying: “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.”
Crown has faced a number of regulatory issues in recent times. In October last year, Crown was found to be “unsuitable” to operate Crown Melbourne in in Victoria following an investigation by the state’s Royal Commission.
Crown did not lose its licence, due to the potential economic repercussions for Victoria, but was ordered to adhere to special measures, including 33 recommendations made by the Commission.
This investigation came as a result of the Bergin Inquiry in New South Wales, which was launched in August 2019.
The inquiry assessed Crown’s eligibility to receive a casino licence in Sydney, ultimately deeming it “unsuitable”. However, it said it may still be permitted to operate the casino following implementation of its reforms.
Meanwhile, Austrac said that enforcement investigations into SkyCity Adelaide and the Star Entertainment, announced in June of last year, continue. Star and SkyCity, along with Crown, received notice of the allegations, while the National Bank of Australia (NAB) was also contacted by Austrac.
At the time, Austrac said the matter was related to “serious non-compliance” with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (AML/CTF Rules).
Original article: https://igamingbusiness.com/austrac-launches-civil-proceedings-over-alleged-aml-failings-at-crown/
