The probe is related to Crown’s use of casino junkets to bring wealthy gamblers to its Melbourne casinos and possible non-compliance with due diligence and AML requirements.
AUSTRAC has launched a formal investigation into potential breaches of Australia’s AML laws by Crown Resorts related to its dealings with Asian casino junkets.
Crown revealed in an ASX filing that it had been informed by AUSTRAC that the potential non-compliance concerns relate to ongoing customer due diligence, and adopting, maintain and complying with an AML/CTF programme.
The concerns were identified in the course of a compliance assessment that commenced in September 2019 and focused on Crown Melbourne’s management of customers identified as high risk and politically exposed persons (PEPs).
AUSTRAC’s compliance assessment into Crown was launched in September 2019, just two months after reports from 60 Minutes, The Age and The Sydney Morning Herald warning about Crown Melbourne’s use of Chinese VIP junket operators and their links to illicit activity.
According to the Australian Financial Review, Crown Resorts is accused of failing to act on suspicious transactions that its Melbourne casino knew were linked to Chinese junket operators who brought wealthy gamblers to its casinos.
Crown’s Melbourne casino filed almost 50,000 reports to AUSTRAC in 2019, largely as a result of customer transactions exceeding the AUD 10,000 threshold for automatic reporting.
“Some of them are suspicious matter reports [SMRs],” AUSTRAC chief executive Nicole Rose told a Senate hearing. “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.”
An AUSTRAC official first contacted Crown in June 2017 seeking an explanation of its relationship to Alvin Chau, the boss of Crown’s largest junket partner Suncity. Chau has been banned from entering Australia due to suspected links to money laundering and organised crime.
Crown chairman Helen Coonan reportedly said AUSTRAC’s letter had not been brought to the attention of the board, and that she was determined drive the reforms needed. The company is said to have stopped all dealings with junkets until next year as it reviews its policy on their use.
According to Rose, the enforcement matter with Crown could take up to two years.