Meticulous investigations into illegal activities at Crown Resorts have revealed that the extent to which criminal elements had infiltrated the organisation may have been much more severe than initial assumptions. Evidence that points to dirty money showing up in the operator’s bank accounts, as recently as February, has set off a fresh wave of questions.
Victoria’s royal commission into casino giant’s operations was recently informed that money laundering had been detected in 14 new bank accounts that did not form part of the 2020 Bergin inquiry.
The decision as to whether or not Crown is deemed fit to hold its Melbourne casino license is in the hands of Commissioner Ray Finkelstein, QC. However, as the inquiry was informed, he is not aware of the full extent of the money laundering operations as Crown had postponed an investigation into its bank accounts until recently.
“Had Crown started that review any earlier than February this year, the results would be known to this commission,” counsel assisting Meg O’Sullivan said.
Crown had delayed the launch of a full review of its accounts, seemingly despite its bank’s warnings that suspicious transactions had been identified in 2014. The company held this position in the face of mounting media reports in 2019 about money laundering in its accounts, and in defiance of the external expert advice given to it in 2019 and in 2020, to launch a full review.
2020’s Bergin inquiry in NSW determined that Crown was unfit to run its new Sydney casino. One of the main reasons for this judgement was that the company had been proven to have facilitated money laundering via two patron deposit bank accounts held by shell companies, identified as Southbank Investments and Riverbank Investments.
Ms O’Sullivan pointed out that the review being conducted by Deloitte into Crown’s other accounts would prove whether money laundering in those accounts is “just the tip of the iceberg”.
“Deloitte’s preliminary analysis suggests that of those 45 bank accounts, there are 14 Crown bank accounts with evidence of money laundering. It appears that Crown does not yet know the full extent of that problem, save that it’s likely greater than previously thought,” she said.
The inquiry recently heard that Crown had approached Katherine Shamai, an anti-money laundering expert at Grant Thornton, to launch a review of its bank accounts in August 2019. However, Shamai did not hear from Crown again until over a year later in October 2020, when she was asked to review only the Southbank and Riverbank accounts. As a result, she managed to uncover over $5 million in suspected criminal transactions between 2013 and 2019.
Ms Shamai informed the inquiry that Crown’s lawyers, MinterEllison, tasked her with reviewing other accounts linked to Crown’s Melbourne and Perth casinos in January 2021. This came a full two months after Crown had informed the Victorian Commission for Gambling and Liquor Regulation that the company had already initiated such a review.
According to Ms Shamai, in February Crown’s new lawyers, Allens, issued her with an order to cease the near-complete investigation as the company had opted to employ another party to complete the work.
The expert testified that Crown’s instructions to her were to limit her investigation of its accounts to a set number of “typologies” that may indicate illegal behaviour. As such, she was limited and could not conduct a “full search”. Shamai stated that she was unable to speculate as to why Crown would scuttle her investigation if its stated intention of exposing examples of suspicious transactions was sincere.
According to Crown, it is undergoing a “reform” process to improve its money laundering countermeasures and corporate governance to reclaim its Sydney casino licence.
Ms O’Sullivan’s statements, however, poured cold water all over Crown’s intent when she revealed to the commission that external experts had evaluated Crown’s new anti-money laundering controls and found some of them to be inadequate, a discovery that she said raised “serious concerns about Crown’s ability to implement consistent, effective and sustainable reforms to address its past money laundering failures”.
“It’s open to concluded that Crown’s first steps on its pathway are simply a knee-jerk reaction to the revelations of the Bergin inquiry, even the supposed new and improved Crown had continuing anti-money laundering problems,” she said.
The inquiry is set to resume soon and is expected to present a final report by August 1.
