Austrac Accuses Three Top Australian Casinos of Money Laundering

Over the years several Australian land-based casino groups have come under scrutiny for controversial partnerships, abnormalities in their bookkeeping and other financial missteps.

None of this has evolved into much beyond some negative press and a series of challenging questions which for the most part have gone unanswered. However, the Australian Transaction Reports and Analysis Centre (Austrac) is determined to see bad actors brought to heel.

 Austrac Exposes ‘Cuckoo Smurfing’

Austrac is the Australian agency tasked with “detecting, deterring and disrupting criminal abuse of the financial system”. Their latest drive has been to expose and uproot the money laundering methodology they call “cuckoo smurfing”.

The act involves illegal cash being funnelled into legitimate bank accounts, both private and business, to hide the criminal origins of the funds.

Austrac CEO Nicole Rose PSM said

“This method has been used by criminal syndicates involved in crimes that inflict serious harm on our community. We rely on financial businesses to report to AUSTRAC and partner with enforcement to stop these criminal syndicates and protect members of the Australian community.”

It is these probes into financial maleficence that has brought several well known Australian gambling and entertainment groups under the microscope and the results of these inquiries are not looking good for these businesses.

Riddled With Questionable Transactions

Austrac is out to prove that no quarter will be given regardless of size or reputation having placed not only the placed the National Australia Bank (NAB) under formal review but also Crown Resorts, the Star Entertainment Group, and the SkyCity Entertainment Group.

Nicole Rose commented saying:

“The Australian casino sector is at risk of criminal misuse due to the products and services they offer.”

This is in relation to allegations that the casinos have been involved in casino junkets which were nothing more than fronts for money laundering, as well as their management of player accounts of individuals deemed “high risk and politically exposed”. This includes any sitting member of a political party, a prominent businessperson and their close friends and family.

Austrac are also targeting specific contraventions of section 68 of the Victorian Casino Control Act 1991, which makes it illegal for a casino to accept credit card payments and then reimburse the customer in the form of casino chips.

For this one AML transgression alone Austrac has declared proof of over €100 million in illegal transaction at the Crown Melbourne casino.

Austrac is fully invested in rooting out these cases of “serious non-compliance” and abuses of the country’s clearly defined AML/CTF Act, promising that they will “not hesitate to draw on our regulatory and enforcement powers” to bring the criminals behind these abuses to justice.

 The Knock on Effect

One might consider the AU$1.3 billion paid by Westpac bank and AU$700 million settlement paid by the Commonwealth bank in recent AML/CTF cases to be a noteworthy financial blow, however, the real impact of these investigations could be far more significant.

With Austrac launching official investigations, the following projects have been indefinitely suspended:

• $9.4 billion - The merger between the Star Group and Crown Resorts suspended.
• $1.7 billion – The launch of the completed Crown Australia casino delayed.

These are massive financial deals and expenditures which have been brought to a stop, and this is before Austrac determines the level of culpability each company and its leadership hold.

Having already seen an 8% market price crash due to the announcement of the investigations only time will tell how much more these share value of these groups will plummet as the Austrac investigation reveals the depths of these illegal activities.