How suburban pubs are being used to launder money

Unwitting gamblers have been duped into helping criminals “clean” millions of dollars at suburban pokies lounges across Melbourne.

Gamblers are being duped into helping criminals ‘clean’ millions of dollars in suburban and regional pokies lounges.

Clueless gamblers are being duped into helping criminals “clean” millions of dollars in suburban and regional pokies lounges, criminal intelligence data released for the first time reveals.

Information released to the Sunday Herald Sun under freedom of information laws reveals 75 Victorian pokies operators reported more than 400 customers they suspected of using poker machines to launder money, or commit other crimes, to the national financial crimes watchdog, AUSTRAC.

AUSTRAC typically only shares the intelligence it gathers with police and national security agencies and rarely makes such detailed snapshots of its intelligence public.

The information shows Victorian pokies operators reported a total of $10.5m in suspicious transactions in the year ending May.

One venue, which the Herald Sun understands is in Melbourne’s western suburbs, reported 127 suspicious transactions totalling $964,000.

Another, believed to be in the southeast, reported 133 suspicious transactions totalling $833,000.

Crown Casino will soon be subject to new anti-organised crime restrictions. Picture: William West

Reports of suspicious gambling activities to AUSTRAC are regarded as so sensitive it is against the law for venues to even confirm that they have made them.

Alliance for Gambling Reform advocate Reverend Tim Costello said the state government has refused to implement simple reforms that would strike a blow to the criminals using poker machines to make their ill-gotten money seem legitimate.

Rev Costello said he expected a dramatic increase in money laundering at suburban pubs and clubs because the state government had not forced them to comply with the same anti-organised crime restrictions soon to come into effect at the state’s largest pokies operator, Crown Casino.

“(Money laundering is like) a waterbed: you press down on it at Crown … and it just flows into pubs and clubs,” Rev Costello said.

The anti-money laundering reforms set to be introduced at Crown include daily limits for gamblers and mandatory identification checks.

“The thing about criminals is they’ll never want to reveal their identities,” Rev Costello said.

Rev Costello said pubs and clubs were typically being used to launder profits from the drug trade.

He said the Royal Commissions and inquiries into Crown in Victoria, NSW and Western Australia had “put a rocket under AUSTRAC” and forced it to pay more attention to money laundering at pokies venues.

AUSTRAC chief executive Nicole Rose. Picture: Gary Ramage

AUSTRAC national manager Dan Mossop said a recent AUSTRAC campaign to encourage pubs and clubs to more diligently report suspicious pokies transactions saw the agency receive as many reports in two months as it typically does in a year.

The explosion in reports suggests law enforcement agencies have only ever had patchy intelligence about the extent of money being laundered through pubs and clubs.

Suspected money laundering through pokies machines is notoriously difficult to spot, and relies on eagle-eyed venue staff knowing what to look for.

“There is the perception that money laundering occurs in large businesses with international ties,” Mr Mossop said.

“The reality is that criminals target any business without strong money laundering controls to clean dirty money raised from the sale of drugs and other serious crimes.”

Among the common ways criminals launder money is by purchasing winnings receipts from problem gamblers in exchange for cash, so they can justify otherwise unexplained money as being legitimate gambling winnings.

Another method is to buy thousands of dollars of gambling credits — sometimes split across multiple machines — and cash out after gambling only a small portion of it.

Winnings receipts typically do not show how much gamblers have spent on credits, only the amount they have withdrawn from a machineat the end of a session.

The figures released to the Herald Sun suggest criminals are sometimes laundering more than $50,000 in a sitting.

A Victoria Police spokeswoman said the agency “is aware that betting activities such as poker machines can and are being used to launder money”.

“We work closely with our law enforcement partners to share intelligence and target those criminal groups and individuals involved in this offending, which is often occurring in conjunction with other criminal activities.”

The spokeswoman said venues which reported suspicious transactions were “not only helping law enforcement target those involved in money laundering and following dirty money, but also identifying any vulnerabilities within these venues.”