Crown Resorts — AUD 450 million AUSTRAC AML civil penalty

Summary

Crown Melbourne and Crown Perth admitted to systemic, longstanding breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and agreed to pay an AUD 450 million civil penalty — the largest ever imposed on a casino at the time. The admitted contraventions spanned six years and included failure to conduct appropriate risk assessments, lack of risk-based systems and controls, inadequate board and senior-management oversight, deficient transaction monitoring, and failure to conduct ongoing customer due diligence on 505 high-risk customers. The Federal Court of Australia approved the settlement on 11 July 2023 in CEO of AUSTRAC v Crown Melbourne Limited & Anor [2023] FCA 782, with reservations: Justice Lee noted the penalty was at the lower end of the appropriate range and imposed financial-monitoring conditions after Crown claimed paying immediately would cause significant financial hardship.

1. 1 March 2016 – 1 March 2022

   Relevant period of admitted contraventions at Crown Melbourne and Crown Perth.

2. 30 May 2023

   AUSTRAC and Crown file joint submissions with the Federal Court proposing AUD 450 million penalty; Crown files Statement of Agreed Facts admitting breaches.

3. 10–11 July 2023

   Federal Court hearing before Justice Michael Lee.

4. 11 July 2023

   Federal Court approves the settlement, ordering Crown Melbourne to pay AUD 300 million and Crown Perth AUD 150 million in three instalments over two years, plus AUD 3.4 million in costs.

5. +28 days

   First instalment of AUD 125 million due.

6. +12 months

   Second instalment of AUD 125 million due.

7. +24 months

   Final instalment of AUD 200 million due.

• Crown admitted its AML/CTF programmes did not have the primary purpose of identifying, mitigating, and managing money laundering and terrorism financing risks across every designated service provided.
• Crown Melbourne failed to appropriately monitor 380 customers; Crown Perth failed to monitor 166 customers — together 546 contraventions of section 36(1) of the AML/CTF Act for ongoing customer due-diligence failures.
• Crown continued a business relationship with a major casino junket operator until 2021 despite being aware of allegations the operator was connected to organised crime.
• From March 2016 to December 2018, at least 75 suspicious incidents involving approximately AUD 23 million in cash occurred in a private gaming room given to one junket operator at Crown Melbourne.
• Crown failed to appropriately monitor billions of dollars in transactions, including international payment flows, inhibiting law enforcement's ability to detect and disrupt suspicious activity.
• Justice Lee found the contraventions 'systemic, longstanding and egregious; permeating every designated service provided by Crown,' and that the harm included exposing the Australian community and financial system to systemic ML/TF risk over six years.

Primary sources

1. CEO of AUSTRAC v Crown Melbourne Limited & Anor [2023] FCA 782 — Federal Court of Australia, 2023-07-11

   Search Federal Court of Australia judgments database (Austlii) for case reference [2023] FCA 782.

2. AUSTRAC and Crown agree to proposed $450 million penalty (media release) — AUSTRAC, 2023-05-30 [link]
3. Federal Court makes ruling in Crown matter (media release) — AUSTRAC, 2023-07-11 [link]
4. Statement of Agreed Facts — AUSTRAC v Crown — AUSTRAC / Federal Court of Australia, 2023-05-30 [link]
5. Crown Resorts and AUSTRAC agree to $450 million fine over money laundering breaches — ABC News, 2023-05-29 [link]

Lessons (observation, not prescription)

• AML programme design intent matters more than its written policies.
• Suspicion that doesn't reach AML is the architectural failure, not the individual call.
• Penalty payment structure is now part of the negotiation, with continuing oversight as a feature.