Crown Limited engaged in money laundering, tax evasion, and other governance practices that have spawned headlines across multiple media platforms.
The failure of the gaming giant to keep its nose clean in a world where corporate governance is coming under greater scrutiny has attracted appropriate, stringent, and scathing criticism.
What the royal commission in Victoria has done quite clearly is establish that Crown allowed poor governance and compliance practices to evolve, but , quite frankly, that should never have been a surprise given the work already done by the Bergin inquiry into the operations of the casino.
The Victorian due process considered in conjunction with the Bergin inquiry report creates a compelling case for Crown to lose its license and for the company to find its feet again under new management.
What the Bergin report found in relation to banks, however, is that the banks were busy trying to shut down accounts as they became aware of activities that were designed to launder funds.
Two Crown companies associated with the Casino operations in both Perth and Melbourne had accounts with HSBC. Those accounts were jettisoned by HSBC itself when decided to cease involvement in the gaming sector.
Banks that got involved with Crown spent time reporting the fact they suspected some form of money laundering was going on.
Tactics such as multiple deposits being made at different branches of the ANZ banks by somebody into a Crown-affiliated account on the same day raised alarm bells in a particular case.
“ANZ provided [Crown] with a detailed spreadsheet listing specific transactions over a number of days in January 2014, indicating that the amount of these deposits was under the cash reporting threshold of $10,000 and the fact that they were made to the same patron account but at different branches of the bank on the same or following day,” the Bergin report noted.
Deposits such as this would not be happening in this form with banks unless people were trying to avoid having transactions being large enough to be reported. It is less than bright to think that a pattern would not be noticed at some stage by the bank itself.
The problem is that deposits hitting accounting within such a timeframe was always going to prompt scepticism about the motivations of the depositors and why so many transactions.
Another factor brought up in the Bergin report is that Crown enabled laundering of funds but it had no real systems to detect and deal with it.
Counsel assisting the royal commission in Victoria, Adrian Finanzio, made the point that Crown had spent time rejecting allegations about money laundering until the Bergin inquiry commenced.
“[Crown] took the position with the formal requirements of the AML/CTF legislation by reporting suspicious transactions and, beyond that, money laundering and criminal activity was the purview of other external agencies,” counsel assisting noted.
It was also noted that there was still a forensic investigation to be completed into Crown’s patron accounts by Deloitte but the results of this review are not expected until later this year and well after the report from the royal commission itself is handed down.
The timing is unfortunate given that the royal commission into the gambling den on the Yarra will not be able to incorporate it into its findings and it also means media – particularly investigative journalists – will need to keep an eye on when that report it being released.
It was clear from the earlier Bergin report that the banks were all too prepared to start shutting accounts when evidence surfaced that games were being played. Green ticks for the banks that sought to raise concerns all round.
Crown must now wait for the final report to be tabled to learn its fate at the hands of Ray Finkelstein. The tidings will be rather unpleasant if the royal commissioner takes his lead from counsel assisting’s address delivered the other day.