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Federal Court makes ruling in SkyCity case

Money LaunderingFederal Court makes ruling in SkyCity case

SkyCity Adelaide Pty Ltd (SkyCity) has been ordered by the Federal Court of Australia to pay a $67 million penalty after AUSTRAC launched civil penalty proceedings against it for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The Court also ordered SkyCity to pay AUSTRAC’s costs at $3 million.

The court found that SkyCity’s AML/CTF Programs failed to meet the requirements of the AML/CTF Act, and that it did not carry out appropriate ongoing customer due diligence.

Australia’s free and open economy can be exploited by bad actors to launder illicit funds, and money laundering remains an intractable issue that comes with significant harm to the public. SkyCity admitted that its contraventions made it vulnerable to criminal exploitation, and exposed the Australian community and financial system to money laundering and terrorism financing risk.

SkyCity’s failure to comply with the AML/CTF Act over many years allowed high-risk customers to move millions of dollars through the casino, in ways that made the source and ownership of the funds unclear.

SkyCity also provided services through high-risk channels and to high-risk customers without appropriate risk-based controls. It failed to carry out required checks on 121 customers, including where SkyCity knew customers were the subject of law enforcement interest, or where there were indications that some posed a higher risk of money laundering.

The casino also failed to establish an appropriate framework to ensure adequate board and senior management oversight of its AML/CTF Programs.

SkyCity has taken steps to address the issues identified in these proceedings however this remediation remains ongoing.

AUSTRAC acting Chief Executive Officer, Peter Soros said casinos, like all businesses, must take their anti-money laundering obligations seriously.

“Criminals will always seek to take advantage of the gambling sector to clean their dirty money. If casinos and other gambling entities have weak anti-money laundering systems and controls, they leave themselves vulnerable to criminal exploitation,” Mr Soros said.

“Today’s result shows AUSTRAC is prepared to take action when businesses, including casinos, fail to comply with the legislation. Businesses who ignore their obligations are affecting the Australian community by leaving the door open to criminal activity.

“Money laundering is not a victimless crime. It happens because criminals are trying to clean their dirty money obtained by lucrative illegal activities like trafficking drugs or humans, and it is often reinvested to further criminal enterprises and amplify these harms.”

This is the second civil penalty that AUSTRAC has secured against Australian casinos, after the Federal Court last year ordered Crown Melbourne and Crown Perth to pay a $450 million penalty over two years for breaches of the AML/CTF Act.

“Our continued efforts in this space will act as a strong deterrent for all casino operators in Australia who think they can avoid their AML/CTF obligations.”

The order from Justice Lee comes after SkyCity admitted contraventions of the AML/CTF Act. AUSTRAC and SkyCity agreed in May that a $67 million penalty was appropriate in all the circumstances. The penalty takes into account SkyCity’s cooperation during the investigation and admissions enabling early resolution of the proceedings.

About AUSTRAC

AUSTRAC (the Australian Transaction Reports and Analysis Centre) is the Australian Government agency responsible for detecting, deterring and disrupting criminal abuse of the financial system to protect the community from serious and organised crime.

Through strong regulation, and enhanced intelligence capabilities, AUSTRAC collects and analyses financial reports and information to generate financial intelligence.

Learn more about AUSTRAC.

Media contact

Email: media@austrac.gov.au

Phone: 02 9950 0488

Story from austrac.gov.au

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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