Crown reviews staff practices over reporting of potential money laundering

Gaming group Crown is reviewing all patron accounts at two casinos over fears staff may have ‘inadvertently compromised’ anti-money laundering practices.

The Inquiry Commissioner said she regarded the aggregation practices were “a significant matter”. Picture: AFP

The James Packer-backed Crown Resorts is reviewing all of the accounts at its Melbourne and Perth casinos after discovering its staff in Perth engaged in practices that potentially compromised the company’s ability to monitor and report potential money laundering.

Crown’s chief legal officer and top anti-money laundering officer Joshua Preston revealed to an inquiry into the company on Tuesday that a recent review of its transaction monitoring systems found staff at Crown Perth had “aggregated” transactions by patrons in their reporting practices.

This could have assisted so-called “structuring” or “smurfing” by those seeking to launder money through the casino.

All individual transactions above $10,000 trigger an automatic report that is sent to Australia’s anti-money laundering and counter-terrorism finance regulator, Austrac.

In updated written evidence provided to the inquiry late on Friday night that became public on Tuesday, Mr Preston revealed the aggregation practice had “inadvertently compromised” the ability of the company’s anti money-laundering team to monitor and report at Crown Perth.

He said the issue had been reported to Austrac and to the risk management committee of the Crown Resorts board.

It has previously been revealed that major banks shut down Crown bank accounts used by offshore VIP patrons to deposit and withdraw gambling money because of apparent large-scale money laundering.

Mr Preston said a review over the past month of two shell companies and accounts, Riverbank Investments and Southbank Investments, that were allegedly used for the transfers, had revealed the aggregation practices by cage staff at Crown Perth and at Crown Melbourne in relation to the Southbank Investments account.

“We are reviewing all of our other accounts,’’ Mr Preston said, before noting it was too early to say if the practice was more widespread, including at Crown Melbourne.

“In Perth there is some evidence of it (aggregation) … (But the review) is not progressed enough to provide any form of certainty.”

The Inquiry Commissioner, former NSW Supreme Court judge Patrica Bergin, said she regarded the aggregation practices were “a significant matter”, hinting it would go to a key term of reference of the inquiry — the suitability of Crown to be a casino licence holder for its new Barangaroo facility in Sydney.

“This is a most serious issue and you are not getting the message about the seriousness of (it),’’ she said after criticising Mr Preston for apparently “blaming” the cage staff for the problem.

While he rejected the suggestion he had laid blame on the staff and suggested there were issues around their training, he said he accepted the ultimate responsibility for the issue.

“I have to take responsibility for the broad outcomes of it,’’ he said.

“I accept responsibility for weaknesses in the AML program where they have occurred … There was a weakness there and it was not identified.”

Mr Preston also conceded he never inquired of members of his Crown AML and legal teams why ASB Bank and Commonwealth Bank refused to operate the Southbank and Riverbank accounts in 2018 and 2019 because of money laundering concerns.

He said he was unaware if Austrac had been informed about the bank’s moves.

“Yes I believe that would have been not unhelpful for Austrac,’’ he said.

“On reflection it was something I should have drawn to Austrac’s attention.”

Crown’s former executive chairman John Alexander said last year that Neil Jeans, from the consultancy Initialism, reviewed Crown’s anti-money laundering systems in late 2018 and declared it “completely compliant” and “a gold star customer”.

But Mr Preston said he was unaware if Mr Jeans was ever made aware about the existence of the Southbank and Riverbank accounts.

Mr Preston also on Tuesday recanted evidence have gave in a written submission to the inquiry in March in relation to an investigation into allegations that Crown’s vice president of international operations, Veng Anh, authorised a junior casino staff member to wire $500,000 to a Melbourne drug trafficker in January 2017.

Mr Anh did not know the man, nightclub operator Nan Hu, was a drug trafficker.

In March Mr Preston said Crown was conducting an internal inquiry into Mr Anh. On Tuesday he said he had become aware there was no disciplinary investigation specifically into Mr Anh, who — like thousands of staff — has been stood down from his position due to COVID-19 related issues at Crown.

Mr Preston also revealed that while he had responded to a query from the WA gaming regulator in November 2017 on the transaction, described it as “unusual” and said it had “raised concerns”, he never spoke to Mr Anh about it. But he denied he had turned a blind eye to the incident.

Mr Preston was also asked about footage obtained from Victoria’s gambling watchdog of a freezer bag full of cash being unloaded in one of the venue’s high-roller rooms at Crown Melbourne, which was publicised by independent MP Andrew Wilkie last year.

Mr Preston acknowledged that after being asked by the inquiry to review the footage again last weekend, it had been taken in May 2017. He had previously declined to give details about the footage without seeking the permission of the VCGLR.

The inquiry continues on Wednesday when Crown executive Jason O’Connor is scheduled to be examined.