Crown’s agreement to the enforcement action marks the conclusion of a process that began over a year ago, as the business faces continued regulatory scrutiny over its historic AML failings.
The Australian Transaction Reports and Analysis Centre (Austrac), the government agency responsible for detecting and disrupting criminal abuse of the financial system, said in a statement that the settlement has been filed with the Federal Court of Australia, which will consider the penalty at a scheduled hearing in July.
The agency said that in reaching the agreement, Crown has admitted that it operated in contravention of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) at both Crown Melbourne and Crown Perth.
Breaches discovered since Austrac began its investigation last year, included failing to appropriately assess the money laundering and terrorism financing risks they faced, and to identify and respond to changes in risk over time.
Matter for the court to decide
While the parties agreed that the A$450m is appropriate, Austrac emphasised that it is a matter for the court to determine the appropriate penalty.
Nicole Rose, Austrac’s chief executive, said it is important that casinos adhere to strict rules as the sector is at risk of exploitation by organised criminals seeking to clean money obtained through criminal acts including the sale of illicit drugs, scams and 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,” Rose said
“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.”
Crown AML failings
Austrac commenced civil penalty proceedings against Crown Resorts over allegations of “serious and systemic” AML and counter-terrorism financing failings in March 2022.
Over the course of its investigation, Austrac identified numerous contraventions of AML rules including failure to 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, and failure to establish an appropriate framework for board and senior management oversight of their AML/CTF programs.
Crown did not have a transaction monitoring program that was appropriate to the nature, size and complexity of their business, while its enhanced customer due diligence program lacked appropriate procedures to ensure higher risk customers were subjected to extra scrutiny.
The group also did not conduct appropriate ongoing customer due diligence on a range of specific customers who presented higher money laundering risks.
Crown has faced a number of regulatory issues in recent times, with two eight-figure fines imposed in Victoria since the start of last year. The group was found to be “unsuitable” to operate in both Victoria and Western Australia following local investigations.
In June 2022, Crown was acquired by private equity giant Blackstone in a deal worth AU$8.87bn.
Blackstone completed the acquisition after obtaining approval to run a land-based casino in the three states where Crown operates – Victoria, New South Wales and Western Australia – with shareholders, state regulators and the Federal Court of Australia also approving the deal.
Original article: https://igamingbusiness.com/legal-compliance/legal/crown-agrees-au450m-penalty-over-aml-failings/
