Australian casino operator Crown Resorts was warned in 2017 about its dealings with the Suncity Group junket, while Crown’s chair claimed the company’s anti-money laundering compliance failings were the result of ‘ineptitude’ not criminality.
Tuesday saw the resumption of the New South Wales Independent Liquor & Gaming Authority (ILGA) inquiry into Crown’s suitability to hold a state gaming license for its Crown Sydney property, which is scheduled to open in mid-December.
It was Crown chair Helen Coonan’s second day in the hot seat on Tuesday, one day after Crown announced that it was under investigation by the Australian Transaction Reports and Analysis Centre (AUSTRAC) for “potential non-compliance” with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations at the Crown Melbourne casino.
Coonan was confronted by an email AUSTRAC apparently sent Crown in June 2017, in which the company was advised that Alvin Chau, the boss of the Suncity junket that ran a VIP gambling room at Crown Melbourne, was a foreign ‘politically exposed person’ with a “substantial” criminal history.
In 2017, AUSTRAC asked Crown to provide “documentation evidencing Crown’s consideration of the appropriateness of continuing to provide designated services to Mr. Chau.” On Tuesday, Coonan expressed ignorance of the email but claimed the board “most definitely” should have been made aware of its existence at the time.
In 2019, Aussie media reported that Suncity was caught running an illegal ‘cash desk’ at its Melbourne VIP room. Coonan said Tuesday that the failure to break off ties with Suncity “may have been ineptitude or a lack of attention [but] I don’t think it was deliberately turning a blind eye.” Coonan claimed it was “difficult to agree” that Crown was ‘facilitating’ money laundering.
ILGA commissioner Patricia Bergin, who last week suggested it was “inappropriate” for Crown to be pressing ahead with its Sydney opening plans while its license hung in the balance, suggested to Coonan that the average Aussie “could reasonably conclude that this conglomerate of ineptitude, lack of attention and failing to intervene facilitated money laundering.”
Coonan replied in the affirmative, but qualified her agreement by saying she objected to the suggestion that Crown was deliberately turning a blind eye to criminality, “which I think is a different degree of understanding.”
Coonan also acknowledged little awareness of two Crown bank accounts through which millions of dollars flowed into VIP gamblers’ accounts at Crown casinos, much of it structured in a way to avoid extra financial oversight. The accounts were later blocked by two Aussie banks.
While Coonan agreed that this should have raised a red flag within Crown, she disagreed that it was “the magnitude of the deposits” that was the problem, rather “the pattern and whether or not there are suspicions that should be triggering further inquiries.”
Coonan suggested that Crown could avoid junkets altogether for a spell, although allowing that junket activity might continue “with the greatest of care.”
Coonan made a statement to the inquiry expressing “great regret that this inquiry has run the course it’s run.” Coonan claimed Crown was “ready to ensure that what we see as the necessary changes are implemented and adhered to if given the privilege to be able to continue.”
Crown’s annual general meeting is scheduled to be held on a virtual basis this Thursday (22), and the fate of three directors whose seats are up for renewal appear dubious at best. Shareholders are likely to demand even greater executive turnover to ensure the public relations own-goals of the past few weeks aren’t repeated.