Australian Court Judge Unhappy with AUSTRAC’s Crown Resorts Lawsuit
Crown Resorts already admitted to money laundering and other violations in Victoria, New South Wales (NSW), and in Western Australia. Therefore, a federal judge in Australia blasted the Australian Transaction Reports and Analysis Centre (AUSTRAC) over its continued foot-dragging in a lawsuit it launched against the casino operator.
It’s been over a year since AUSTRAC launched a legal case against Crown for its financial failings. The country’s financial watchdog is also going after Star Entertainment and SkyCity Group for similar failures, accusing them of widespread violations of Australian anti-money laundering (AML) laws.
Crown recently requested that AUSTRAC give it more time to develop its defense, according to court documents. The entity agreed, leading federal judge Michael Lee to rake it over the coals.
Comparing Crown Debacle to the Napoleonic Wars
Lee accuses AUSTRAC of not taking its prosecution of Crown and the others seriously. This is the only explanation he could come up with to rationalize why the watchdog would agree to give the casino operator until May to mount a defense since it’s already had a year to do so.
The judge labeled AUSTRAC’s decision “astounding,” comparing it to the resolution that ended the Napoleonic Wars. He stated, addressing the entity directly, “The Congress of Vienna took nine months to talk about the future of Europe; you’ve had 12 months to talk about admissions.”
Queensland and NSW already determined that Crown and Star, by their own admission, failed to comply with AML laws for years. In addition, they violated responsible gambling procedures by not conducting risk assessments of multiple customers. These left billions of dollars on the casino floors, which Crown was happy to collect without batting an eye.
AUSTRAC launched its suit against Crown last March when state-level inquiries into the operators were concluding. At the time, it said there were at least 576 violations that, according to Australian law, could each carry a financial penalty of around AU$22.2 million (US$15.32 million).
It isn’t likely that Crown would have to pay AUSTRAC over a billion dollars. However, it’s reasonable to expect to pay a couple hundred million once the lawsuit concludes or through a settlement. Six years ago, gaming operator Tabcorp faced a penalty of AU$702 million (US$484.66 million), but only had to pay AU$45 million (US$31.06 million).
AUSTRAC tried to explain to Lee that it had no choice but to agree to the extension. It said that Crown’s argument that it is building a defense against Australian AML laws warranted the extra time. It added that its officials weren’t experienced enough to counter Crown lawyers’ expertise.
Lee isn’t willing to keep the matter before the courts any longer than is absolutely necessary. He ordered Crown to file a response to the suit by February 27. After that, a hearing will be held on April 28, at which time it’s likely settlement negotiations will take place.
Crown recently gave an update on its financial health, showing an overall loss for its latest fiscal year. Crown Melbourne and Crown Sydney saw revenue of AU$923.8 million and AU$113 million (US$637.24 million and US$78.01 million), respectively.
Both properties saw significant year-on-year gains. However, Crown Perth lost ground, with revenue of AU$731.7 million (US$505.16 million).
Because of the problems it has faced lately, Crown’s overall bottom-line was a loss of AU$945.4 million (US$632.18 million).
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