Posted on: July 12, 2023, 07:39h.
Last updated on: July 12, 2023, 07:39h.
Crown Resorts appeared in an Australian courtroom this week to defend itself against a recommended AUD450-million (around US$300 million) fine. The latest difficulties are the result of an investigation by the financial watchdog Australian Transaction Reports and Analysis Centre (AUSTRAC) and the judge presiding over the case has upheld the recommendation.
The fine comes as AUSTRAC concluded that Crown management – either actively or passively – violated anti-money laundering and counter-terrorism financing (AML/CTF) regulations for years. The accusations and conclusions are the same as what several Australian states already concluded.
For the watchdog to be able to deliver the penalty, a federal judge had to first sign off on the amount, the largest-ever against a gambling company anywhere. AUSTRAC has now received the go-ahead after Crown unsuccessfully argued that it didn’t have the money to pay the fine, which also helped it find a way to reduce the final amount it will have to pay.
Crown Gets Royal Fine
AUSTRAC once again targeted Crown last year following the completion of inquiries in New South Wales and Victoria. Both states had previously determined that the large casino operator repeatedly manipulated AML/CTF rules for its own benefit. It also altered financial reports in an effort to cover its tracks.
Despite the overwhelming evidence and testimony that emerged during those inquiries, AUSTRAC repeatedly gave Crown extensions during its own investigation. That was until a judge lost patience and forced the watchdog to take action.
It presented its findings last week, adding that it gave Crown a little leniency because it has reportedly shown remorse for its failings. If it hadn’t, the financial settlement it agreed to with the company could have been much higher.
Crown has undergone almost a complete transformation of its executive ranks. There are new high-placed executives at its casinos and the board of directors has been revamped in an effort to show that the company is taking the issues seriously.
Having taken over as CEO less than a year ago, Ciarán Carruthers is trying to ensure that goal is met. He has already enacted a number of changes across the company and said after the AUSTRAC agreement was reached that Crown has “invested tens of millions to bolster financial crime compliance and embed global best practice for the gaming sector.”
AUSTRAC Shows Mercy
The judge who approved AUSTRAC’s fine, Michael Lee, also approved its conditions. One of these is that Crown will have two years to pay the amount, interest-free.
AUSTRAC could have forced the company to make a lump-sum payment, but reportedly gave in to a plea by Crown. It had said that it wouldn’t be able to come up with that much money at once and would need time.
That was enough for the watchdog to agree, although Lee wasn’t as convinced. Like he did when AUSTRAC was delaying its resolution earlier this year, he slammed the entity for not being thorough.
Lee apparently didn’t want to prolong the debacle any further and dropped the gavel on AUSTRAC’s recommendations. In doing so, Crown claimed another, albeit small, victory.
Instead of the original settlement amount, the final bill, in real terms with no interest, is for AUD406 million (US271.6 million), according to the Financial Review.