AUSTRAC alleges The Star permitted customers to move money through non-transparent payment channels, did not understand or assess the sources of money moving through these channels and failed to consider whether it was appropriate that they continued an ongoing business relationship with high-risk customers.
The statement of claim highlights 43 customers associated with the now-outlawed junkets as well as 38 international customers and 34 domestic customers.
AUSTRAC said it had worked closely with the state and federal regulatory bodies to commence its civil penalty proceedings.
The watchdog’s chief executive Nicole Rose said their investigation had identified a number of issues including poor governance, failures to manage financial risk, as well as poor anti-money laundering and counterterrorism financing compliance.
“Criminals will always seek to exploit the financial system to launder their money and harm the community. Businesses, as the front line of defence of our financial system and our communities, are often the first to be alerted to criminal activity,” Rose said.
AUSTRAC added The Star’s casinos were “vulnerable to criminal exploitation” and the group’s failure to manage the risks had exposed Australia and the global financial system to the potential of systemic money laundering and terrorism over many years.
The watchdog has alleged extensive mismanagement took place at The Star’s entities including failing to establish an appropriate board framework, failing to conduct due diligence on a range of high-risk customers, and failing to establish a fitting transaction monitoring program to keep track of transactions and identify suspicious activity.
Rose said it was clear a lack of appropriate controls had prevented the casino group from appropriately managing high risk customers and had facilitated the movement of money in non-transparent ways.
The Star’s chief executive Robbie Cooke said the new management was working to transform the company’s culture and business practices.
“We are committed to improvement but there’s a lot still to do,” he said.
“Our goal is to earn back the trust and confidence of AUSTRAC and all our regulators,” Cooke continued, adding the group is reviewing the watchdog’s statement of claim.
The casino group was savaged by shareholders at its annual general meeting last week, with almost 30 per cent voting down its proposed remuneration report after a “disastrous” year.
Chairman Ben Heap issued a mea culpa to shareholders last month, pleading for a chance to demonstrate the casino giant could turn over a new leaf and implement a complete cultural overhaul.
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