Crown Resorts says it can't pay $450m AUSTRAC fine
Crown Resorts appeared in an Australian court this week to defend itself against a proposed fine of A$450 million ($300 million). The latest difficulty is the result of an investigation by financial regulator Australian Transaction Reports and Analysis Center (AUSTRAC), with the presiding judge upholding the recommendation.
The fine was imposed because AUSTRAC concluded that Crown's management had actively or passively breached anti-money laundering and counter-terrorism financing (AML/CTF) regulations over a number of years. The charges and conclusions are consistent with those already reached by several Australian states.
In order for regulators to impose penalties, a federal judge first must approve the amount, which is the largest ever levied against a gambling company. AUSTRAC has now been given the go-ahead after Crown argued unsuccessfully that it did not have the money to pay the penalty. Although the argument failed, it helped Crown find a way to reduce the amount it ultimately had to pay.
Crown receives royal fine
Crown was targeted by the Australian Transaction Reports Analysis Center (AUSTRAC) last year following the completion of investigations in New South Wales and Victoria. Both states have previously found that the major casino operator repeatedly manipulated anti-money laundering/counterterrorism financing rules for its own benefit. Financial reports were then altered to cover their tracks.
Despite the overwhelming evidence and testimony that emerged during these investigations, AUSTRAC has repeatedly granted coronavirus extensions as part of its own investigations. Until the judge loses patience and forces the watchdog into action.
AUSTRAC released its findings last week, adding that it had granted Crown some leniency because it had reportedly shown remorse for its failings. If this had not been the case, the financial settlement with the company could have been much higher.
Crown Group's leadership has undergone a near-total transformation. The casino appointed new senior managers and a new board of directors to show the company is taking the issues seriously.
Ciarán Carruthers, who took over as CEO less than a year ago, is working hard to ensure this happens. He has already made a number of changes across the company and said after finalizing the AUSTRAC deal Crown had "invested tens of millions of dollars to improve financial crime compliance and establish global best practice for the gaming industry".
AUSTRAC SHOW MERCY
Judge Michael Lee, who approved AUSTRAC's fine, also agreed with the conditions. One is that Crown has two years to pay the amount interest-free.
AUSTRAC could have forced the company to pay a lump sum but reportedly gave in to Crown's demands. Crown said it could not raise that much money immediately and would take time to do so.
Although Lee wasn't convinced, it was enough for regulators to agree. As he did when AUSTRAC delayed a resolution earlier this year, he criticized the company's lack of thoroughness.
Lee clearly did not want to prolong the disaster any further and abandoned AUSTRAC's advice. This gave Crown another victory, albeit a small one.
The Financial Review reported that the final bill (excluding interest) was actually A$406 million ($271.6 million), not the original settlement amount.
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Source: www.casino.org
