Crown Resorts Agrees To Pay $450M Fine For Breaching Australia’s Anti-Money Laundering Laws

Crown Resorts, Australia’s largest gaming and entertainment group, has reached an agreement with the Australian Transaction and Analysis Centre (AUSTRAC) to pay a $450 million fine for historic violations of Australian anti-money laundering laws at its Melbourne and Perth casinos.

Admission of fault:

Prior to reaching the aforementioned agreement with AUSTRAC, Crown has admitted that “it operated in contravention of the Anti-Money Laundering and Counter-Terrorism Financing Act.” In addition, as part of the deal, Crown has admitted that “it failed to assess the money laundering and terrorism financing risks facing its casinos, and did not have appropriate risk-based systems in place to mitigate the risks.” Also, the company has admitted that it “did not have a transaction monitoring program that was appropriate to the nature, size and complexity of their business and did not conduct appropriate ongoing customer due diligence on a range of specific customers who presented higher money laundering risks.”

In this regard, in a statement, Crown Resorts said: “The decision marked a significant step in rectifying our failings of the past.” Furthermore, Crown’s CEO Ciarán Carruthers added: “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. 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. 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 behavior. We are committed to implementing these reforms to make Crown a better business and lift the standards for the entire industry.”

The fine requires Federal Court approval:

However, if the fine is given necessary validation by the Federal Court, it would be the third-biggest fine in the history of an Australian corporations. The first two are:

• Westpack – it was fined a record $1.3 billion for over 23 million anti-money laundering violations;
• Commonwealth Bank – it was fined $700 million for so-called “intelligent deposit machines” that permitted millions of dollars to pass through to drug importers.

What’s more, the projected approval could be modified by the Federal Court, with a hearing scheduled for July 10 and 11. In this regard, AUSTRAC CEO Nicole Rose said in a statement: “Crown’s contraventions of the AML/CTF Act meant that a range of obviously high-risk practices, behaviors and customer relationships were allowed to continue unchecked for many years. 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.”

Additionally, the company was the topic of royal commissions in Victoria and Western Australia, as well as an investigation led by a judge in New South Wales. Bergin’s investigation revealed that “Crown facilitated money laundering and partnered with operators that had links to organized crime.” The company was also found ineligible to possess a gaming licence in all three states.

Blackstone to get out of the deal if the fine exceeds $750M:

During February 2022, Crown Resorts was acquired by global private equity group Blackstone for $8.9 billion. Under the terms of the takeover, Blackstone was permitted to get out of the agreement if the penalty was over $750 million.

Relatedly, during November, Crown was fined $120 million by the Victorian Gambling and Casino Control Commission (VGCCC) for violating its responsible service obligations. Also, Crown was fined an extra $30 million by the VGCCC in April for giving a permission to players “to cash bank checks made out to themselves, exacerbating gambling harm and likely aiding criminal infiltration by money launderers”.