SYDNEY (BLOOMBERG) - Crown Resorts has been sued by Australia's financial crimes regulator for "innumerable" breaches of anti-money laundering laws, including allowing customers to use shoeboxes stuffed with cash to gamble, adding to the troubles faced by the scandal-plagued casino operator.
Crown's non-compliance with anti-money laundering rules was "longstanding, systemic and reflective of wholly inadequate oversight by the board and senior management", the Australian Transaction Reports and Analysis Centre (Austrac) said in a statement of claim filed in the Federal Court on Tuesday (March 1). This exposed Crown "to the risk of being exploited by organised crime", the regulator said.
Crown has previously said it expects to pay "significant civil penalties" from the regulator's probe. In 2020, Westpac Banking Corp paid with a record A$1.3 billion (S$1.28 billion) fine to settle more than 23 million breaches of anti-money laundering laws.
Crown last month agreed to a A$8.9 billion takeover from United States private equity giant Blackstone. The deal ends a sorry chapter in Crown's history after it was found unsuitable to run its Sydney casino - which is still shut more than a year after it was scheduled to open - and given two years to address a litany of wrongdoing at its flagship Melbourne casino, including underpaying taxes and exploiting problem gamblers.
In its statement of claim Austrac highlighted the behaviour of 60 customers at Crown's Melbourne and Perth casinos whom the company failed to carry out appropriate due diligence.
They engaged in large transactions that appeared suspicious, including cash in shoeboxes or cardboard boxes, plastic bags, small denominations of notes and counterfeit cash, Austrac said in its claim. Crown was aware that some of the customers had been charged or arrested in connection with offences, including dealing with the proceeds of crime and money laundering.
Between them, the 60 people had a turnover of more than A$70 billion and losses (or Crown wins) of about A$1.1 billion, Austrac said.
The regulator also identified a further 447 customers who engaged in repeated patterns of transactions consistent with money laundering, including the quick turnover of casino chips with little or no gaming activity.
Crown "chose to elevate customers' desire for privacy over AML/CTF (Anti-Money Laundering/Combating the Financing of Terrorism) compliance, including in cases where Crown Melbourne or Crown Perth were aware customers had raised red flags", the regulator said in its claim.
Crown shares fell slightly in Sydney on Tuesday to trade at A$12.31 against Blackstone's offer price of A$13.10. The bid still needs approval from gaming regulators and shareholders.
In a statement on Tuesday, Crown said it has developed a comprehensive remediation plan and overhauled its approach to managing financial crime risk. It is reviewing Austrac's statement of claim.
