Blackstone-owned Crown Resorts has come to an agreement to pay a substantial fine of $294 million (A$450 million) in response to its violation of anti-money laundering laws. This development marks a significant step forward in the company’s quest to put behind its troubled past.
Under the leadership of billionaire founder James Packer, Crown Resorts faced severe scrutiny, prompting a series of investigations across all the states in which it operated, as well as an inquiry by the financial crime watchdog. These inquiries were triggered by media reports shedding light on widespread governance issues within the company.
Subject to the approval of the federal court, this fine will become the third-largest penalty ever imposed on an Australian company. Combined with previous penalties, Crown Resorts’ total fines now amount to a staggering A$680 million, following a string of allegations related to turning a blind eye to organized crime and neglecting employee safety, all of which were aired during hearings since 2020.
According to Nicole Rose, the CEO of the Australian Transaction Reports and Analysis Centre (AUSTRAC), Crown’s non-compliance allowed a multitude of high-risk practices, behaviors, and customer relationships to persist unchecked for an extended period.
To regain the trust of regulatory authorities, Crown Resorts has severed ties with foreign travel agents, commonly referred to as “junkets,” who were responsible for bringing in Chinese gamblers. Furthermore, the company has undertaken a significant leadership overhaul since 2021, aiming to demonstrate its commitment to rebuilding robust governance systems. In 2022, Blackstone acquired Crown Resorts for a substantial sum of A$8.9 billion.
Expressing satisfaction over the resolution, Crown Resorts CEO Ciarán Carruthers, who assumed the role in September, stated, “We are pleased to have reached this agreement with AUSTRAC.” He further emphasized the transformation that the company has undergone, distancing itself from the unacceptable and historic breaches that were committed.
Notably, Blackstone, the parent company of Crown Resorts, refrained from providing any comments regarding this matter.
Pending the federal court’s decision, which is scheduled for hearings on July 10 and 11, the fine, if approved, will position Crown as the third-largest offender in terms of penalties, trailing only behind Australia’s two largest banks, Westpac Banking Corp and Commonwealth Bank of Australia. In 2020 and 2018, these banking giants were ordered by AUSTRAC to pay A$1.3 billion and A$700 million, respectively, due to their own anti-money laundering breaches.
Please note that the conversion rate of $1 to Australian dollars is 1.4743.