‘Cowboy outfit’: Crown hit with new class action over money laundering

Crown declined to comment.

Maurice Blackburn is already pursuing Crown through the Federal Court seeking millions of dollars for shareholders who lost money in a $1.3 billion share price crash after 19 Crown employees were arrested for gambling crimes in China in 2016. That case is set to go to trial in 2022.

Crown has been rocked this year by the NSW Independent Liquor and Gaming Authority inquiry into the group, which has revealed, among other things, a systemic failure to prevent money laundering at its Melbourne and Perth casinos and in patron bank accounts.

The lawyer running the case, Maurice Blackburn class actions principal Miranda Nagy, said shareholders would have expected Crown to have best-practice compliance with anti-money laundering (AML) regulation, especially since the group claimed publicly to take those obligations seriously.

“Instead it appears Crown’s systems left the company potentially exposed to criminal activity
happening on its premises and through its bank accounts,” Ms Nagy said.

“We believe these governance failures have caused real loss to shareholders.”

The class action’s lead plaintiff, Greg Lieberman, said he thought he was buying shares in a responsible and well-governed company, not a “cowboy outfit”.

AUSTRAC identified its concerns about Crown during a compliance assessment launched in September 2019 looking at Crown Melbourne’s management of customers “identified as high risk and politically exposed persons”.

That assessment came shortly after The Age, Sydney Morning Herald and 60 Minutes revealed that some of Crown’s most important high-roller “junket” tour partners were linked to powerful Asian criminal syndicates and money launderers, triggering the NSW inquiry.

The ILGA inquiry was launched in August and held 60 days of public hearings which concluded last month, but Crown waited until the last week of the probe before conceding that more probably than not, money laundering had occurred in its bank accounts.

Maurice Blackburn will likely use evidence from the inquiry to support its claim, including that Crown did not give its directors or senior executives anti-money laundering training until this year, and that it did not document how it assessed its junket partners for criminal links.

The NSW gambling regulator last month ordered Crown to delay opening its new Sydney casino, which was to commence operations before Christmas, until the inquiry hands down its findings in January on whether Crown is fit to hold a casino licence in the state.

Counsels assisting the inquiry submitted to Commissioner Patricia Bergin that Crown’s relationships with junkets linked to organised crime, the risks it took in China, its failures to prevent money laundering and major shareholder James Packer’s “deleterious” influence over corporate governance were all reasons why it should be found to be an unsuitable licence holder.