The financial watchdog is taking Star Entertainment to Federal Court, launching civil penalty proceedings against the embattled casino operator for alleged systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
AUSTRAC launched an industry-wide compliance campaign in 2019 and opened an enforcement investigation into The Star in June 2021, following an investigation by this masthead that uncovered extensive criminal activity.
Two independent inquiries in NSW and QLD found The Star unfit to hold its casino licences earlier this year as well as determining the group had a deep-rooted cultural problem that developed due to poor governance.
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 monitor transactions and identify suspicious activity.