Crown Perth deliberately established a special bank account under the name Riverbank Investments to help disguise transactions made by Chinese high rollers, according to the latest testimony before the Western Australia royal commission.
According to Asia Gaming Brief, former Crown CEO Ken Barton was the latest executive to be questioned by the commission, which has focused mainly on the issue of money laundering.
Asked if the name was chosen to shield the destination of VIP funds, Barton said he had “some understanding that … there was a desire by some patrons to not have the name of the casino in as the counterparty to some financial transactions.”
At the time, he added, he didn’t worry that the account could increase the risk of money laundering. Commissioners also learned that Crown’s anti-money laundering (AML) compliance officer was empowered to determine if the company would deal with a patron known to engage in money laundering. Barton acknowledged that was a mistake.
In another black mark for Crown, the commission also learned that Barton wasn’t trained in AML or counter-terrorism financing until 2020, 10 years after he joined the company. He stepped down from his role as CEO and managing director in February, after the Bergin Report found he was “no match for what is needed at the helm of a casino licensee.”
As probes in two Australian states continue, Crown again warned there is “very real potential” of default under its debt facilities if its Victoria license is canceled. Crown reminded commissioners that it’s the biggest single site employer in Melbourne with more than 11,500 employees, and has paid at least $1.4 billion in casino taxes and other fees since 2014.
Credit Suisse Australia estimates that the value of Crown’s Melbourne assets would plummet by more than AU$2 billion if the company lost its license and its assets were broken apart.
In testimony before the Perth Royal Commission, convened to weigh Crown Resorts’ suitability to operate a casino in that state, former CEO Barry Felstead said staff in China were told to take a “low-key” approach but not to suspend their activities entirely ahead of their arrests in 2016.
The official reportedly said the company “took measures that … at the time were adequate in relation to what we were doing was firstly legal and what we were doing certainly wasn’t going to put the staff at risk.”
Felstead said the group had sought advice from a large law firm in China and an advisory company headed by a former CIA chief, which was the basis it used to suggest the “low-key approach.”
Similar testimony was heard during a probe in New South Wales, where Crown was deemed unsuitable to open and operate its new casino in Sydney. Prior to the arrests of 19 employees in China, Crown Resorts was warned by a customer in China that Beijing was preparing to arrest people recruiting Chinese citizens to gamble in foreign countries, the NSW Gaming inquiry heard on Thursday.
Crown’s former international high-rollers executive, Jason O’Connor, said he received an email from an employee in March 2014 relaying advice from a Crown customer, Mr. Xu, to remove Crown staff from Mainland China for a couple of months because of the threat of arrests.
The former executive was questioned about an email he received in June of 2015 regarding staff in China being on “high alert,” but countered that “there was always an element of risk of doing business in China – at particular timeframes, there was a more heightened risk.”
In total, 19 Crown employees were arrested by Chinese authorities in October 2016. Sixteen, including O’Connor, were later jailed for illegally promoting gambling in the country.
Yet another probe in New South Wales found Crown “unsuitable” to hold a license for its Sydney casino, but did not suggest license cancelation.
