Crown Resorts dropped four internal money laundering reviews in last year, Victorian royal commission hears

Crown abandoned at least four reviews aimed at combating money laundering in its casinos in the past year, Victoria’s royal commission has heard.

Crown last night submitted thousands of documents to counsel assisting containing the phrase “anti money laundering” and ”counter terrorism financing.” Picture: NCA NewsWire / David Crosling

Crown Resorts abandoned at least four reviews aimed at combating money laundering across its casinos in the past year, despite external experts raising significant concerns about its vulnerability to organised crime.

On Tuesday the Victorian royal commission into Crown heard that the principal of boutique anti-money laundering (AML) firm Initialism, Neil Jeans, was asked to complete a number of tasks in a bid by the company to satisfy the NSW Bergin inquiry that it took money laundering risks seriously.

In February the Bergin inquiry found Crown was temporarily unsuitable to operate its new $2.2bn Barangaroo casino, in part due to it facilitating money laundering.

Mr Jeans, who had been intermittently advising Crown since 2018, was asked in October 2020 to conduct a risk assessment of the company’s AML and counter terrorism financing (CTF) processes at Crown‘s Melbourne and Perth casinos as the company “didn’t have a view of the risk assessment in a single document” to show the Bergin inquiry.

But after completing a draft report, Mr Jeans received no response from Crown’s head of financial crime Nick Stokes, or any other executive, so did not proceed with the job.

“We provided input, we provided some drafts, but we did not receive a response back from those drafts,” Mr Jeans said.

“I assume they were going down a different path and taking a different look. I think at that point there was a desire by Crown to take a more detailed look at anti money laundering and counter terrorism financing risks.”

In November he was asked to assist Crown in developing an AML compliance assurance plan, but he said it was put to one side due to “competing priorities” and Mr Stokes’ AML team not having the resources to work on the project. Last week Mr Stokes told the commission he had to fight to increase the size of his team from five to 20.

In early 2021 the company asked Mr Jeans to examine the bank accounts of Crown Melbourne and Perth to see if the company was following new rules, stipulating all customer cash deposits and third party remittance payments be returned.

An examination of two months worth of statements identified numerous banned payments that did not appear to have been refunded, but Crown did not recommend any clarifying work be done, despite Mr Jeans presenting the results to executives in February.

“We haven’t undertaken that work simply because we haven’t been provided that information by Crown and asked to take it to the next level,” Mr Jeans said.

In December and January Mr Jeans was tasked with reviewing Crown’s compliance with statutory reporting rules for international fund transfers.

Although he examined just one month‘s worth of transfers, he found 134 instances of under-reporting or non-compliant reporting across Crown Melbourne and Perth. Mr Jeans said he provided those results to Mr Stokes but did not receive any further instructions.

The commission heard earlier on Tuesday that Mr Jeans recommended a review of Crown‘s Southbank and Riverbank bank accounts, which the Bergin Inquiry found to have facilitated money laundering, more than one year before it was launched in late 2020.

But the scope of the report was limited to only look at three of nine different types of money laundering activity and excluded foreign currency accounts, Mr Jeans said, most likely “because there was a desire by Crown to provide this to the Bergin inquiry” before it concluded.

The review, which Grant Thornton completed, found that money laundering likely occurred through the Southbank and Riverbank accounts, which customers could deposit money into to withdraw, in the form of chips, at the casino. This could then be exchanged for a cheque.

Mr Jeans said the review did not include an examination on whether Crown identified or escalated any of the suspicious transactions while a separate root cause analysis he proposed on the issue was yet to occur.

“It’s Crown’s view that they wanted to take a more considered approach to that, rather than just a simple analysis,” he said.

The evidence comes after counsel assisting the commission Meg O’Sullivan told commissioner Raymond Finkelstein on Monday that Crown’s attempt to fix its AML systems were “knee jerk reactions” to the Bergin inquiry that may not be effective, casting doubt over Crown Melbourne’s future.

“A relevant question will be whether Crown can be found suitable while such reforms are pending,” Ms O’Sullivan said.

On Monday night, Crown submitted thousands of documents to counsel assisting containing the phrase “anti money laundering” and ”counter terrorism financing.”

Ms O’Sullivan indicated Mr Jeans may have to be recalled at a future date as the documents are “potentially relevant to the matters we might wish to put to the witness today.”

The inquiry continues on Wednesday.