After two days of hearings July 10 and 11, the US$293 million settlement between Australian operator Crown Resorts and financial crime agency AUSTRAC has been approved by the country’s Federal Court.
The penalty, which was levied due to historic violations of anti-money laundering and counter-terrorism financing (AML/CTF) laws over the course of several years, represents the highest settlement ever for an Australian operator.
According to the court ruling, Crown Perth will pay a fine of US$100 million and Crown Melbourne will pay the remaining US$200 million, and at the request of Crown the fees will be staggered over the course of the next two years.
Per details reported by Inside Asian Gaming, the first installment of US$83.5 million will be due within 28 days; the next installment, of the same amount, will be due within 12 months; and the remaining balance must be paid within two years of the order date. The operator will also shell out some US$2.3 million in costs.
During the early stages of the proceedings, reports had surfaced that Justice Michael Lee, who presided over the hearings, was not satisfied with the proposed fine and found it to be insufficient. However, the final judgment reflected the proposal, and even included Crown’s request to stretch the payments.
“The penal orders to be made reflect the serious and unacceptable nature of the contraventions and are appropriate to deter both repetition of contravening conduct by Crown or like contraventions by other reporting entities who may seek to prefer profit over proper risk management,” Lee wrote, per IAG.
“In particular, it will encourage casino license holders to ensure that their AML/CTF programmes, and the provision by them of designated services to customers, are appropriately calibrated to the ML/TF risk reasonably posed to the business.”
Shortly after the ruling was delivered, Crown CEO Ciarán Carruthers said in a statement that there is “no place for money laundering or terrorism financing at Crown or in our communities,” and echoed much of the same themes of contrition and remediation that the company has maintained for the last year-plus.
“Under new ownership and leadership, we have introduced sweeping reforms as part of our Future Crown transformation program and invested tens of millions to bolster financial crime compliance and embed global best practice for the gaming sector,” the CEO said.
One theme that came up repeatedly over the course of the hearings was a lack of oversight and proper risk management, especially with regard to junket operations, which solicited wealthy and often high-risk gamblers to private rooms inside Crown properties.
Investigators revealed that from March 2016 through March 2020, a number of junkets, including the notorious and now-defunct SunCity Group, held private rooms at Crown and operated their own cash cages.
Court filings showed that the SunCity room received nearly 60 suspicious activity complaints from late 2017 to early 2018—authorities also reportedly made three additional inquiries throughout the rest of 2018 about the room’s cash cage specifically. Two of those instances involved large cash deposits of US$1 million and US$468,132, and the third involved an employee handing a patron hundreds of thousands in cash in the parking lot.
According to the Daily Mail, AUSTRAC lawyer Michael Hodge KC said at one point that “cash was colorfully carried in paper bags, shoeboxes, and briefcases” by unknown individuals and was “exchanged by junket operators with other unknown persons.”
However, Hodge also posited that there was no stated reason as to why Crown had failed so massively in its compliance, and indicated that the agency felt that the failings were not deliberate; Lee was not convinced, both in the explanation and in the idea that the company has fully changed.
“If there wasn’t a deliberate intention to contravene the laws, then what was the reason?” Lee asked Hodge, per the Daily Mail. “People just didn’t understand? What am I supposed to take as the reason?”
“One can draw conclusions from the fact it was in Crown’s interest to encourage this sought of activity, and the extent of the turn over it facilitated,” Lee went on to add. “Contrition means more than saying sorry when you get caught. It means a state of mind in people who have done wrong to play with a straight bat in the future.”
Risk assessment was another topic of much discussion, as the company revealed that for years it had automatically rated every player as being low AML/ CTF risks. Crown also reportedly ranked every international jurisdiction that money was coming in or out of as being low risk.
