SYDNEY (Reuters) – Australia’s financial crime watchdog filed a wide-ranging civil lawsuit against casino operator Crown Resorts Ltd on Tuesday, accusing it of failing to assess risks of money laundering and terrorism financing at its only two operational resorts.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) said the company started by billionaire James Packer had failed to meet its obligations, making its business and the country’s financial system “vulnerable to criminal exploitation”.
AUSTRAC’s investigation found “poor governance, risk management and failures to have and maintain a compliant AML/CTF programme detailing how Crown would identify, mitigate and manage the risk of their products and services being misused for money laundering or terrorism financing,” the watchdog’s CEO, Nicole Rose, said in a statement.
Crown “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,” Rose added.
AUSTRAC did not publish its statement of claim against Crown but a Federal Court database showed a lawsuit filed by AUSTRAC against Crown was filed on Tuesday.
Crown said it was reviewing AUSTRAC’s statement of claim, but that it had developed a comprehensive mediation plan and overhauled its governance since allegations of poor due diligence surfaced at a regulatory inquiry in 2020.
AUSTRAC began its investigation into Crown in October 2020 during the first of what would become three bruising regulatory inquiries into Crown’s governance, one for each city where it has a casino.
The inquiries prompted authorities in Sydney to suspend the company’s gambling licence – before it had opened a new resort there – while authorities in Melbourne put Crown under government supervision.
A third inquiry, in Perth, is yet to report its findings.
The company has meanwhile replaced most of its board and management and recommended shareholders – who include billionaire founder and 37% owner James Packer – back a $6.3 billion buyout by private equity giant Blackstone Inc.
A Blackstone representative declined to comment.
(Reporting by Byron Kaye; Editing by Leslie Adler and Sam Holmes)