Asleep at the wheel: AUSTRAC’s stunning record of failure

Crown Casino was able to breach anti-money laundering laws because regulator AUSTRAC was asleep at the wheel and out to lunch for more than 20 years.

The year isn’t even half over and our purported anti-money laundering regulator AUSTRAC already has an iron lock on the Academy Award for regulatory chutzpah in the exercise of utter incompetence.

AUSTRAC head Nicole Rose was astride a very high horse, when announcing Tuesday, the $450m penalty agreed with Crown Casino over its breaches of the Anti-Money Laundering and Counter-Terrorism laws.

The “casino sector is at risk of exploitation by organised criminals seeking to clean their dirty money, money which criminals make through the sale of illicit drugs, scams and even human trafficking,” our redoubtable regulator thundered.

Crown’s failures “meant that a range of obviously high-risk practices, behaviours and customer relationships were allowed to continue unchecked for many years.” Ms Rose added.

Yes, she meant they were allowed to continue unchecked by Crown.

In her utterly unknowing confession, she was also saying that they were allowed to continue unchecked for years, also by AUSTRAC.

I guess that was why, missing from her statement was the detailed exposition of how a team of brilliant, dogged, fearless and utterly incorruptible Aussie ‘G-men’ - in the style of Eliot Ness’s Untouchables – nailed Crown and indeed its competitor Star and nailed them good.

Ur; quite possibly, because that didn’t happen.

AUSTRAC CEO Nicole. Picture: NCA NewsWire / Gary Ramage

To put it bluntly, AUSTRAC was asleep at the wheel and out to lunch for almost the entire period from Crown starting in Melbourne in 1994 and Star in Sydney in 1997.

Everything that Rose said should have been ringing alarm bells for the casino boards and managements, goes double – indeed, goes triple – for the regulator actually charged with fighting and hopefully preventing money-laundering and terrorism financing.

But in more than 20 years, it never actually seemed to have occurred to AUSTRAC.

The redoubtable regulator only ‘discovered’ not just actual money-laundering, but even more basically the potential for money-laundering in casinos, when it was basically dropped in its somnolent lap, all wrapped up in tissue paper and tied with pink ribbons.

It just never ‘occurred’ to AUSTRAC that it – that’s it, the regulator - should have been taking aggressive and permanently continuous action to police what went on in the casinos From basic protocols to snap inspections, to accounting ‘raids’, and all sorts of forensic interventions.

None of the bad behaviours were caught by AUSTRAC action. Either regular audit-style action or snap interventions on intelligence. Or even just standing back and observing. Gee, look at all those billions flowing through the casinos; billionaires flying in on private jets.

Do you think, do you really thunk, it’s all utterly and completely above board? Not even corners being cut, far less actual money-laundering?

Perhaps AUSTRAC has been hiding its forensic light under a barrel. Perhaps Ms Rose can detail 25 years of close regulatory action; but, unfortunately, regulatory action that failed to find any bodies, so to speak.

It was only whistleblowers and various issues that erupted around junket operators; and only in the last ten years; that forced the bad behaviours to the surface.

AUSTRAC itself played a zero, zip – utterly missing in action – role in any of the exposures or running things to ground.