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Australia ‘Fraudulent scam': Crown faces new money laundering scandal

13:53  01 july  2021
13:53  01 july  2021 Source:   theage.com.au

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Signage adorns the side of the Crown Casino in Melbourne on March 22, 2021 after Crown Resorts received a takeover bid from US investment manager Blackstone just weeks after being denied a licence to run a multi-billion-dollar Sydney casino, the Australian gaming group said (Photo by William WEST / AFP) (Photo by WILLIAM WEST/AFP via Getty Images) © Getty


Crown Resorts faces a fresh money laundering scandal stemming from its illegal practice of accepting credit card payments in exchange for gambling chips through the hotel desk at its Melbourne property.

The casino giant's chief financial crimes officer, Steven Blackburn, told Victoria's royal commission into the company he expected a review underway into the credit card transactions would find indications of money laundering, and that the total value of payments could total more than the $160 million already identified.

Crown's licence for its new Sydney casino is suspended after an inquiry in NSW found it enabled money laundering in its bank accounts, and the credit card payments are a new headache for the James Packer-backed group as Victoria's royal commission reviews its Melbourne casino licence.

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Crown disclosed in June that it had breached Victorian law between 2012 and 2016 by allowing international visitors to make credit card charges of up to $500,000 to their hotel accounts in exchange for casino chips.

Mr Blackburn, who joined the company from National Australia Bank in February, said on Thursday that senior managers should have known the practice - which only came to light because a junior employee raised his concerns at a staff training session in March - could cause legal and money laundering issues.

Commissioner Ray Finkelstein suggested they did know but "simply didn't care", because they decided: "we're not going to interrupt the flow of revenue and if we break a few laws, bad luck".

Commissioner Finkelstein said it was not an accident that Crown processed the payments through its hotel desk and issued fake hotel invoices.

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"The whole thing was a fraudulent scam from the outset and everybody involved would have known that," he said.

"I struggle to reach an alternative conclusion," Mr Blackburn responded.

The inquiry examined a memo from Crown senior legal counsel Robert Meade that outlined his concerns the payment process was "clearly designed" to get around Chinese laws limiting the movement of money out of the country.

Crown also did not report large transactions to the financial crimes watchdog AUSTRAC as it would have to for bank transfers, and it prevented banks from reporting suspicious transactions because it masked gambling payments as hotel payments.

Mr Blackburn agreed with those concerns. Deloitte was now analysing all transactions to determine whether the total amount was greater than $160 million and was searching for indications of money laundering which Crown would have to report to AUSTRAC, Mr Blackburn said.

Crown employee urged to threaten regulator

  Crown employee urged to threaten regulator Crown Melbourne's compliance head Michelle Fielding says she was asked to relay that senior management was "furious" with the state gaming regulator.Michelle Fielding, Crown's regulatory and compliance executive general manager, on Monday said she felt "uncomfortable" telling a Victorian Commission for Gambling and Liquor Regulation member in 2019 that the firm's chief legal officer, Josh Preston, was "furious".

"I suspect there will be," he said. "But reporting them seven years later...is not terribly helpful".

Mr Blackburn said Crown's VIP team previously promoted the credit card facility to Chinese visitors as a way to get money out of the country. He assumed the practice stopped in 2016 after 19 Crown staff were arrested in China.

The inquiry heard on Monday that Crown knew the credit card payments were probably illegal and formulated arguments it could use to defend itself if it was caught by the Victorian gaming regulator.

Mr Blackburn said it was clear Crown had an unhealthy attitude towards financial crime and legal compliance.

However, there had been significant change over the past year and a half, he said, and he had not encountered any cultural issues during his four months with the company.

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Crown reveals looming debt breaches .
Crown Resorts told the Victorian government during an inquiry into its Melbourne operations that it is not in the public interest for it to fail. The company's Victorian operation, under the microscope of a royal commission into whether it can retain a licence, wrote a letter to the state government last week requesting a meeting to discuss its commercial affairs. In hearings just a day earlier, the gaming giant's executive chair Helen Coonan was grilled about the July 2 letter from Crown's external lawyer Arnold Bloch Leibler to Consumer Affairs, Gaming and Liquor Regulation Minister Melissa Horne.

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