Suspicious bank accounts not investigated at Crown, royal commission hears

by Mia Chapman Last Updated
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Victoria’s royal commission into Crown Resorts has heard that the casino operator did nothing for more than a year about bank accounts it was recommended to investigate as part of anti-money laundering controls.

News.com.au reports that the gaming giant’s anti-money laundering and counter terrorism adviser, Initialism, told the company about suspicious transactions occurring in its subsidiaries’ accounts 13 months before the company acted, the inquiry heard.

In December 2019, Crown closed the accounts of Southbank and Riverbank Investments after it was revealed there was evidence of money laundering occurring.

Initialism principal Neil Jeans, who appeared as a witness on Tuesday, said he informed former chief executive Ken Barton about the accounts and recommended a full review of all transactions hitting Crown’s accounts.

Mr Jeans said he told Crown to look into the accounts in light of media allegations of money laundering in 2019, but the casino giant did not act until mid-2020 when the accounts became a focal point of the NSW Bergin inquiry into whether Crown Sydney should hold a gaming licence.

Independent auditor instructed to investigate casino transactions

Initialism and auditor Grant Thornton were instructed by Crown to investigate suspicious transactions made within the casino.

Mr Jeans said there were instances of structuring, where a large sum of money went through accounts split up into smaller transactions to come under the $10,000 threshold requiring disclosure to AUSTRAC.

He said it should have been a red flag to Crown that someone was depositing cash amounts at separate bank branches within a two kilometre radius.

“I think the data in this matter clearly indicates structuring because there are multiple transactions below the threshold, which are spread over a series of branches of ANZ over a short period of time,” Mr Jeans said.

“Each of those transactions appears to be trying to avoid the threshold of structuring.”

Initialism also found examples of potential “cuckoo smurfing”, which also involves splitting large sums into multiple smaller transactions to avoid detection but also hiding them within legitimate transactions involving innocent, unwitting bank customers.

Counsel assisting, Meg O’Sullivan said it was “extraordinary” Crown allowed funds to enter its bank accounts and then be extracted at the cash point in the casino without identity checks.

“That strikes me as extraordinary that someone anonymous can put money into a Crown bank account,” she said.

“Crown then allocates it into a particular person’s deposit account and then releases it at the casino end without the patron being present.”

Mr Jeans conceded it was an “unusual” way to process funds.

Initialism and Mr Thornton were given limited scope for their investigations and were only allowed to analyse three accounts.

During Monday’s hearings, it was revealed the extent of money laundering through Crown accounts could have been more widespread than just the Southbank and Riverbank accounts.

A separate Deloitte report found 14 other accounts had evidence of suspicious transactions potentially linked to financial crimes.

Ms O’Sullivan asked Mr Jeans if he believed Initialism and Mr Thornton’s forensic analysis understated the extent money laundering occurring throughout Crown’s account.

Mr Jeans said it was a “difficult question to answer” without seeing all the data from every bank account.

“If there was similar activity on those bank accounts, then, yes, you would be correct it would be understating,” he said.

The principal of the anti-money laundering company said Crown “limited” the scope of the investigation into three Australian dollar accounts.

Crown had engaged Initialism and Grant Thornton to initially look at all accounts, but at a later date narrowed the scope of the analysis to just the Southbank and Riverbank accounts.

The royal commission into Crown Melbourne is to determine if the company is suitable to hold a Victorian gaming licence, following evidence of money laundering, primarily through Asian VIP gaming tour groups known as junkets.

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