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Crown casino’s $450m AUSTRAC penalty questioned by court
The suspicious and potentially criminal activity inside casino operator Crown has been laid bare in the Federal Court as a judge determines whether a $450 million penalty is enough of a punishment.
Naomi Neilson
The exchanges of large amounts of money within Crown Melbourne and Crown Perth’s private rooms are being reviewed before Justice Michael Lee after the casino group admitted it failed to comply with anti-money laundering and counter-terrorism financing laws.
This was of particular concern as AUSTRAC had agreed to have the full penalty paid in instalments over two years and without interest.
Justice Lee said the casino group would not be paying the $450 million until “two years down the track”, despite what he said was in a media release sent by the Crown casino group a month ago.
Counsel for Crown insisted the figure was not “plucked out of thin air” and the group “can’t afford to pay more than what was agreed”.
“I have never seen [legal] practitioners work harder to get this matter done,” the counsel added about the investigative work.
Representing AUSTRAC, barrister Michael Hodge said it was not possible to determine the extent of the breaches, owed in part to the improper monitoring and record keeping from senior levels.
“It’s impossible to count the number of contraventions, and therefore what we’re left with is a maximum penalty beyond something that is capable of being calculated,” Mr Hodge said.
In his submissions, Mr Hodge said large amounts of cash were transferred through the casino in “colourful ways”, including in envelopes, tied up with rubber bands, in briefcases and shoeboxes.
The court focused on the Crown’s junket programs, which permitted operators to facilitate gambling by high-wealth players in private rooms. They were all largely done so unvetted.
Mr Hodge said Crown would refer VIP customers to the junkets and would extend credits that allowed them to gamble through them but without any oversight. The operators were also “given effectively special rights in relation to the transfer of money”.
It meant customers were graded as low risk, and the casinos were failing to examine the activity of people associated with crimes, such as drug dealers, terrorists and other high-level offences.
There were at least 75 known suspicious incidents inside these rooms, with 58 of those coming from the SunCity rooms that operated within Crown rooms but had junkets based in Macau.
The casino also received 11 inquiries from police about a high-risk customer who had been sentenced to 19 months imprisonment for selling methamphetamine in June 2014. In the casino, the same customer was walking away with $1.3 million in machine payouts.
Justice Lee said he was interested in finding out who at Crown “knew what and when they knew it” so he could make his determination.
The matter will return on Tuesday morning.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
