Australia: Crown Resorts to pay $300M penalty for breaking money-laundering laws

Blackstone-owned Australian casino operator Crown Resorts has been ordered to pay a fine of AUD 450 million ($300 million) for breaching money-laundering laws. The company will be allowed to pay its penalty in interest-free installments over two years. 

The Federal Court found Crown to have committed at least 546 breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act between 2016 and 2022. Additionally, the operator failed to carry out due diligence on over 500 high-risk players, who gambled in VIP rooms. Some of these players reportedly had links to organized crime syndicates or were found to be criminal figures. 

Crown agreed to the payment in May after inquiries and a damning investigation by the country's financial crime watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC). The fine still needed the sign-off of the Federal Court, which by having now approved the penalty is issuing Australia's third-largest corporate fine ever. 

In the ruling, Judge Michael Lee said: "The penal orders reflect the serious and unacceptable nature of the contraventions." Lee further added that the fine was "appropriate to deter both repetitions of contravening conduct by Crown or by other reporting entities who may seek to prefer profit over proper risk management."

Crown Resorts will be required to pay the AUSTRAC AUD 125 million upfront, AUD 125 million within a year, and a further AUD 200 million in two years, reported ABC News. If Crown fails to meet the demand, the watchdog will have the right to demand the money in full and with interest. It will also be allowed to ask Crown to make its payment ahead of schedule if it deems its financial position is strong enough. 

Judge Lee further noted: "It is clear that senior management within Crown knew of the high risk posed by junkets, and that the risks were not merely theoretical." The company was previously hit with a combined AUD 250 million worth of fines in Victoria for disciplinary breaches. It has also been the subject of adverse findings from two royal commissions and a judge-led inquiry. 

Crown's chief executive Ciaran Carruthers

In a statement, Crown's chief executive Ciaran Carruthers said that the judgment has closed the chapter of the company's anti-money laundering and counter-terrorism financing failures. "There is no place for money laundering or terrorism financing at Crown or in our communities," he stated.

Crown was bought by Blackstone after the events at the center of the scandal took place. Since then, the company says it has taken steps to improve its regulatory compliance, including terminating its business with junkets, investing millions in a financial crime team, and improving its relationships with law enforcement agencies.

Justice Lee in the ruling stated that Crown's future conduct would indicate if the company was genuinely remorseful. "Contrition means far more than accepting the reality of a stiff penalty when one is caught and getting rid of those who were primarily responsible," he wrote.