AUSTRAC Launches Legal Action Against Crown for Alleged AML, CTF Breaches

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has commenced civil penalty proceedings in the Federal Court against Crown Melbourne and Crown Perth for alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.

This action follows proactive compliance work with the casino sector which led to a number of detailed enforcement investigations including into Crown Melbourne and Crown Perth’s compliance.

AUSTRAC CEO Nicole Rose said Crown failed to meet their AML/CTF obligations making their business and Australia’s financial system vulnerable to criminal exploitation.

Nicole Rose said: “AUSTRAC’s investigation identified poor governance, risk management and failures to have and maintain a compliant AML/CTF program detailing how Crown would identify, mitigate and manage the risk of their products and services being misused for money laundering or terrorism financing.

“They also failed to carry out appropriate ongoing customer due diligence including on some very high risk customers. This led to widespread and serious non-compliance over a number of years.

“AUSTRAC has taken this strong action to achieve enduring change and ensure that Crown will fully meet their obligations to protect themselves and Australia’s financial system from criminal activity.”

AUSTRAC’s allegations are extensive and include that Crown Melbourne and Crown Perth:

• Failed to appropriately assess the money laundering and terrorism financing risks they faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time.
• Did not include in their AML/CTF programmes appropriate risk-based systems and controls to mitigate and manage the risks to which Crown were reasonably exposed.
• Failed to establish an appropriate framework for Board and senior management oversight of the AML/CTF programmes.
• Did not have a transaction monitoring programme to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of Crown.
• Did not have an appropriate enhanced customer due diligence programme to carry out additional checks on higher risk customers.
• Did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks.

Nicole Rose said: “This is an important reminder to all casinos in Australia that they must have a strong anti-money laundering program in place to protect their business and the community from serious and organised crime.

“Crown is taking steps towards improving its systems, processes and resourcing however there is further work to do and AUSTRAC will continue to work closely with Crown to address ongoing compliance concerns.”