Anti-Money Laundering News and Information

AUSTRAC: Crown overlooked ‘suspicious’ reports

australia

The anti-money laundering regulator has accused Crown Resorts of failing to act on “suspicious” transactions that its Melbourne casino knew were linked to shady gaming junket operators.

In her first public remarks on the investigation into Crown, Australian Transaction Reports and Analysis Centre chief executive Nicole Rose told a Senate hearing that the financial intelligence agency had “serious concerns” about the casino operator’s conduct.

Crown’s Melbourne casino filed almost 50,000 reports to AUSTRAC in 2019, primarily because customer transactions surpassed the legislated $10,000 threshold that requires automatic reporting.

“Some of them are suspicious matter reports [SMRs],” Ms Rose said. “It is not acceptable for the entities to simply report and not to manage the risks.
“There is an expectation in the legislation that they will have a very good understanding of the risk.

“They will look at their own patterns in SMR reports and they will manage that risk accordingly.”

Intelligence that AUSTRAC gathers in its investigations will potentially be passed on to Commonwealth and state law enforcement agencies such as the Australian Federal Police, she said.

.

Gaming inquiry

While Crown came under pressure in Canberra, the company’s chairman Helen Coonan conceded to the separate NSW gaming inquiry in Sydney that its risk management failings had enabled money laundering.

Ms Coonan was led by the inquiry to several instances where the Melbourne casino was alleged to have links to unsavoury Asian junket operators who brought wealthy gamblers to its casinos.

In June 2017, an AUSTRAC official contacted Crown in regard to Alvin Chau, the boss of Crown’s largest junket partner Suncity – which previously had its own private facility at the Melbourne casino.

AUSTRAC asked Crown to explain how its relationship with Mr Chau, who has since been banned from entering Australia because of suspected links to money laundering and organised crime, was consistent with its efforts to comply with AML laws.

Ms Coonan said the letter had not been brought to the attention of the board.

She was also asked about a warning from a Crown staffer that two other junket operators could send standover men to threaten Crown staff.

“That certainly sounds most unpleasant,” Ms Coonan said.

Crown’s licence to operate Sydney’s new second casino is under a cloud.

Three of its directors Jane Halton, John Horvath and Guy Jalland are under pressure to retain their board seats at the group’s annual general meeting on Thursday.

Ms Coonan, a former Liberal cabinet minister in the Howard government, declared she was determined to “stay the course” to drive the reforms required for Crown to hang on to its Sydney casino licence.

“I do think that we are ready and suitable.”

Casino licensing is regulated by the states, whereas AUSTRAC’s investigation is limited to anti-money laundering and counter-terrorism matters.

Evidence given to the NSW inquiry last week by Andrew Demetriou, a director of Crown and the chairman of Crown Melbourne, said there were about 600 suspicious transactions over four years, accounting for just 0.3 per cent of all transactions. The total amount involved is understood to be about $6 million.

Statements by Crown and AUSTRAC on Monday revealed the federal agency was investigating whether Chinese VIP junket operators with links to organised crime used Crown’s casino in Melbourne for illegal activities.

.

Junket operators’ ‘triad links’

The junket operators, based in Macau and Hong Kong, have long been suspected of having links with Asian organised crime groups, known as triads which are said to provide the junkets with capital, protection, drugs, prostitutes and debt collection services.

Independent federal MP, Andrew Wilkie, on Tuesday moved a motion in the parliament calling on the government to establish a royal commission into Crown, accusing Liberal and Labor politicians of running a “protection racket” for Crown.

AUSTRAC officials came under fire from Labor Senator Louise Pratt and independent Senator Rex Patrick for failing to earlier pick up problems at Crown, after a 2017 AUSTRAC report concluded local casinos were “broadly” aware and compliant with their responsibilities in relation to high-risk junket operators.

Ms Rose defended AUSTRAC, noting its lack of legal authority over offshore junket operators and its dependence on financial businesses providing “complex” data and information to the intelligence agency.

The AUSTRAC probe follows revelations by Nine’s 60 Minutes and The Age and The Sydney Morning Herald in July 2019 about Crown Melbourne’s use of Chinese VIP junket operators with links to organised crime such as money laundering and other criminal activities.

AUSTRAC launched a compliance assessment into Crown two months later in September 2019.

The initial examination and the NSW casino inquiry warranted the case this month being elevated to an AUSTRAC enforcement investigation into Crown Melbourne that was publicly disclosed on Monday.

Ms Rose said past cases showed the enforcement matter with Crown could take up to two years.

Some of the problems related to gaming junkets, she said, but there were also other concerning issues that she did not divulge specifics on.

Crown has said it has stopped all dealings with junkets until next year as it reviews its policy on their use.

.

By John Kehoe and James Thomson, October20, 2020,  The Australian Financial Review

Share on linkedin
Share on facebook
Share on twitter
Share on whatsapp
Share on email
Recent Posts