Financial watchdog launches court case against Star casinos
The financial crimes watchdog has hit Star casino group with a lawsuit alleging they exposed themselves, Australia and the global financial system to risks of money laundering and terror financing.
Police & Courts
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The financial crimes watchdog has launched court action against Star Entertainment alleging the NSW and Queensland casino group seriously breached anti money laundering and counter terror financing laws.
According to court documents, AUSTRAC alleges there were hundreds of high risk customers, links to organised crime and question marks over almost one billion dollars that flowed to and from Star’s Australian accounts in just a few years.
AUSTRAC, on Wednesday morning, announced it had launched a civil suit in the Federal Court against Star Pty and Star Queensland which contained “extensive” allegations.
Among them is that Star failed to appropriately assess the risks they faced from money laundering and terrorism financing.
Further, AUSTRAC alleged, Star failed to establish proper oversight for the board and senior management for anti money laundering and terror financing programs.
Star did not have an appropriate way to monitor transactions to identify suspicious activity, AUSTRAC alleges, did not carry out proper checks on high risk customers including those who posed “higher money laundering risks”.
Those alleged failures meant Star allegedly allowed customers to move money through channels that posed high money laundering and terror financing risks and did not understand if the sources of those funds were illegal.
“The Star Entities also failed to carry out appropriate ongoing customer due diligence which has led to widespread and serious noncompliance over a number of years,” AUSTRAC CEO Nicole Rose said.
AUSTRAC alleges Star’s failures left it vulnerable to criminal exploitation which exposed Australia and the global financial system to money laundering and terror financing risks for years.
AUSTRAC is seeking a civil penalty - but the amount is not yet known.
Star, in a statement, said it took anti-money laundering obligations seriously and had cooperated with AUSTRAC.
Star CEO Robbie Cook said the casino group was “transforming” but there was “a lot still to do”.
“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 said in a statement.
AUSTRAC’s court documents say Star’s casinos have huge amounts of cash go through their doors 24/7 and cash is particularly hard to trace and favoured by criminals.
The watchdog alleges $548m was remitted to Star customers through a hotel card channel which involved crime risks including capital flight.
A further $154m worth of deposits were made into Star accounts via another at-risk channel.
At least $140m was remitted to Star customers through a third channel in less than two years - the source of those funds could not be known, AUSTRAC claims.
And in less than one year, from 2016 to 2017, at least $28m came to Star from a Macau bank cash channel with false or misleading information attached to the source of the funds, AUSTRAC’s document says.
Another document, which runs for over 2000 pages, details multiple strategies criminals use casinos to transfer money around the world using chips, loans, transfers and withdrawals through various channels and cards.
The case alleges 117 customers posed high money laundering and terror financing risks but were provided services by Star over the last six years.
Many of the 117 were attached to junkets, groups of overseas gamblers sometimes linked to organised crime, may had acted suspiciously, some were banned in NSW but gambled in Queensland, AUSTRAC alleges.
“Junket operators were provided exclusive and non-exclusive access to private gaming rooms at Star Sydney and Star Qld. Some of these junket operators and their representatives were known to have connections to organised crime,” the court documents claim.
The 117 moved large amounts of cash with unknown entities in Australia and abroad, made suspicious transactions, and the casinos knew some had been charged with financial crimes like money laundering.
One junket operator, Suncity, is named in court documents as having access to a private gaming room in Sydney where they were able to make large cash and chip transactions without any oversight.
Suncity staff allegedly tried to hide suspicious cash transactions from CCTV by repacking cash in a. Computer cupboard or storing bags of cash on a balcony, AUSTRAC claims, but Star continued to provide services.
A further 1087 customers sent money through high risk channels in Sydney’s Star and another 238 in Star Queensland, AUSTRAC claims.
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