by The highly experienced financial crimes controller brought in to clean up Crown says the casino giant was as bad an example hed ever seen of absolutely not monitoring for evidence of money laundering.The Victorian royal commission determining whether the company should keep its gaming licence for Crown Melbourne has heard of of various dodgy practices that circumvented scrutiny by the company’s anti-money laundering (AML) team.
These include patrons making multiple deposits into the Southbank (Melbourne) and Riverbank (Perth) bank accounts under the $10,000 threshold requiring notification to financial crimes regulator AUSTRAC, which the AML team only viewed in aggregate so were not detected as potential money laundering.
There were also single transactions of up to $500,000, which equally needed scrutiny, Crown’s new chief compliance and financial crimes officer Steven Blackburn agreed under questioning by counsel assisting Meg O’Sullivan at Thursday’s hearing.
“They were absolutely not monitoring the activity and they should have been,” Mr Blackburn said.
In relation to recent revelations there had been frequent suspicious card-related transactions by Chinese patrons with the Crown Melbourne hotel, Ms O’Sullivan said: “These patrons were essentially buying chips.
“Instead of going to the chip vendor, they were going 50 metres or 80 metres around the side and buying it from the hotel. Do you not say that everybody should have recognised that the structure of these transactions was wrong?” she asked.
“Yes,” Mr Blackburn responded.
“It depends on the nature of the employee and the level of the employee. I would expect that anyone in a senior role would have known that this was wrong.”
Ms O’Sullivan asked: “It is the case, is it not, that staff were trained in how to process these illegal transactions?”
“Individual staff members may not have known it was illegal under the Casino Control Act,” she added.
“Correct,” Mr Blackburn replied.
The royal commission heard fake invoices were issued as part of the scam, including for hotel rooms that did not exist.
Commissioner Raymond Finkelstein said he suspected it was “not by accident” the card transactions went through the hotel to avoid detection.
“Otherwise, why did they have fake documentation? They issue invoices having a room number where the room number doesn’t exist,” he said.
“The whole thing was a fraudulent scam from the outset and everybody involved would have known that.”
Mr Blackburn replied: “I struggle to reach an alternative conclusion.”
Commissioner Finkelstein said it had long been well known around the world that casinos were prime targets for money laundering and infiltration by criminals.
“People with illegal funds are going to take their cash there. When we had TAB, it killed money laundering at the racetrack. The substitute was the casino,” the former Federal Court judge noted.
“I don’t understand how people who are running a casino cannot be aware … it’s part and parcel of having a casino.”
Mr Blackburn agreed.
“They absolutely should have been aware of it. I don’t understand the motivation,” the executive said.
Mr Finkelstein suggested “they simply didn’t care”.
“In other words, we’re not going to interrupt the flow of revenue … if we break a few laws, bad luck.”
Mr Blackburn said he was “shocked” when he reviewed Crown’s materials and saw “there was next to nothing” on AML and counter-terrorism financing.
He said that while the company’s culture had previously been “really problematic”, AML was now prioritised at Crown and he had confronted “no resistance” in his four months in the role.
The commissioner, however, said it was “not voluntary behaviour”.
Breathing down Crown’s neck were various regulators and three governments – Victoria, Western Australia, where a separate royal commission is under way, and NSW, where damning findings from an inquiry last year led to Crown’s new Barangaroo casino being denied a gaming licence, he said.
“They are being hounded … and they’re fighting for their lives. What choice do they have?” the commissioner asked.
Mr Blackburn said he completely agreed, conceding the financial crimes control problems at Crown were the worst he’d seen in his professional life.
He joined the company on March 1, having previously done the same work for National Australia Bank globally and for CIBC Bank in Canada.
