Continuing to conduct business with “higher-risk customers” in violation of federal anti-money laundering laws and reportedly allowing customers to move funds through risky back channels have resulted in additional civil penalties for Star Entertainment, which is based in Pyrmont, Sydney.
After concluding a joint investigation with police and regulators in New South Wales (NSW) and Queensland that started in September 2019, the Australian Transaction Reports and Analysis Centre (Austrac) filed a lawsuit against the ASX-listed gambling giant in the federal court on Wednesday.
This action was brought after a NSW royal commission-style investigation that led to Star losing its casino license and receiving a record $100 million fine last month.
Following its own inquiry, which was also conducted last month, the Queensland government has also given the firm a show-cause notice asking it to explain why it should keep its casino license in that state.
According to Austrac, Star neglected to take into account their continuous business ties with higher risk clients and permitted customers to move money through opaque and extremely dangerous routes while also being unaware of the source of the money in those channels.
“All casinos must take anti-money laundering obligations seriously as criminals will always seek to exploit the financial system to launder their money,” said Nicole Rose, Austrac’s chief executive.
“Austrac’s investigation identified a multitude of issues including poor governance and failures of risk management and to have and maintain a compliant AML/CTF program. The Star Entities also failed to carry out appropriate ongoing customer due diligence, which has led to widespread and serious non-compliance over a number of years,” she added.
According to Robbie Cooke, Star’s chief executive, the company has been assisting with inquiries and was examining Austrac’s statement of claim. “We are transforming our culture, transforming our business. We are committed to improvement but there is a lot still to do,” he said in a statement to ASX.
“Our goal is to earn back the trust and confidence of Austrac and all our regulators. We will continue to work with Austrac as we build a better, stronger and more sustainable company,” he further added.
The A$100 million fine last month was handed after an investigation revealed a long list of compliance failures, including connections to infamous gang-linked junket operators and Chinese debit card transactions that were passed off as hotel expenses.
After concluding that Star had disregarded its obligations regarding responsible gaming and anti-money laundering, as well as purposefully misleading regulators in the name of profit, the Queensland review found Star ineligible to hold its two casino licenses in the state.