Austrac set to heavily fine Crown Resorts after 500 breaches of anti-money laundering and counter-terrorism financing laws

Financial crimes watchdog Austrac could derail the $8.9 billion Blackstone takeover of Crown Resorts Ltd.

Austrac has accused Crown of over 500 breaches of anti-money laundering and counter-terrorism financing laws.

Each breach could result in a $22.2 million fine.

Any accumulative fine larger than $750 million is enough for private equity firm Blackstone to pull out of the deal.

Blackstone is reviewing the potential impact of the legal action.

“Austrac’s investigation identified poor governance, risk management and failures to have and maintain a compliant (anti-money laundering and counter-terrorism financing) program detailing how Crown would identify, mitigate and manage the risk of their products and services being misused for money laundering or terrorism financing,” Austrac chief executive Nicole Rose said.

“They also failed to carry out appropriate ongoing customer due diligence including on some very high-risk customers.

“This led to widespread and serious non-compliance over a number of years.”

Breaches were highlighted by the $70 billion worth of turnover among risky customers over in Melbourne and Perth that represented a $1.1 billion gaming windfall for Crown.

Austrac released a savage 800-plus report about Crown’s failures just days after the NSW gaming regulator was set to grant Crown a conditional licence to reopen its gaming floor in Barangaroo.

Austrac is yet to quantify the penalty.

However, there are some hints that the fine, while large, won’t be devastating.

“Crown is taking steps towards improving its systems, processes and resourcing, however there is further work to do and Austrac will continue to work closely with Crown to address ongoing compliance concerns.”

In response Crown said, “Crown has developed a comprehensive remediation plan which is intended to position Crown as a leader in the industry in its approach to governance, compliance, responsible gaming and the management of financial crime risk.

“The plan is underpinned by an uplifted organisational culture. Crown recognises the importance of complying with its financial crime obligations and has overhauled its approach to managing financial crime risk.”

Irit Jackson, 2^nd March 202