Australia’s financial crimes watchdog AUSTRAC has commenced civil penalty proceedings in the Federal Court against Star Entertainment Group entities The Star Pty Limited and The Star Entertainment QLD Limited for alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws, it announced early Wednesday.
The proceedings follow the launch of an investigation into Star in June 2021, which was expanded to incorporate the company’s Queensland operations in January of this year.
The range of allegations AUSTRAC is directing at Star include that the company:
- Failed to appropriately assess the money laundering and terrorism financing (ML/TF) risks they faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time;
- Did not include in their AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to which the Star Entities were reasonably exposed;
- Failed to establish an appropriate framework for Board and senior management oversight of the AML/CTF programs;
- Did not have a transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of the Star entities;
- Did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers; and
- Did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks.
It also alleges that, in the absence of adequate AML/CTF controls, Star permitted customers to move money through payment channels that were non-transparent and involved high risks; did not understand the sources of money moving through these channels or whether there was a risk that the source of funds was illicit; and failed to consider whether it was appropriate that they continue an ongoing business relationship with higher risk customers.
The court will now determine whether a civil penalty order is made and any related amount Star may be ordered to pay.
“Criminals will always seek to exploit the financial system to launder their money and harm the community,” said AUSTRAC CEO Nicole Rose. “Businesses, as the front line of defence of our financial system and our communities, are often the first to be alerted to criminal activity.
“AUSTRAC’s investigation identified a multitude of issues including poor governance and failures of risk management and to have and maintain a compliant AML/CTF program.
“The Star Entities also failed to carry out appropriate ongoing customer due diligence which has led to widespread and serious non-compliance over a number of years.”
In response, Star issued a statement on Wednesday claiming it takes its anti-money laundering obligations seriously and has co-operated with AUSTRAC throughout the investigation.
“We are transforming our culture, transforming our business,” said Star Managing Director and CEO Robbie Cooke. “We are committed to improvement but there is a lot still to do.
“Our goal is to earn back the trust and confidence of AUSTRAC and all our regulators. We will continue to work with AUSTRAC as we build a better, stronger and more sustainable company.”