Crown can pay a $450 million penalty for "egregious" breaches of anti-money laundering laws in interest-free instalments but a judge says this may change if the firm's finances improve.
The gaming giant agreed to the fine in a lawsuit brought by AUSTRAC in May and admitted it failed to properly track and report suspicious transactions at its Melbourne and Perth casinos to prevent possible money laundering by criminal gangs, drug dealers and terrorists.
From March 2016 to March 2022, Crown failed to properly monitor about 550 high-risk customers.
The Federal Court heard money was given to the casinos in suitcases and paper bags or was shifted between accounts from overseas junket operators who did not conduct the necessary checks as to whether the funds were legitimate.
After a two-day hearing in which lawyers for the financial regulator and Crown tried to convince the court to approve the fine, Justice Michael Lee on Tuesday signed off on the penalty.
"The penal orders to be made reflect the serious and unacceptable nature of the contraventions and are appropriate to deter both repetition of contravening conduct by Crown or like contraventions by other reporting entities who may seek to prefer profit over proper risk management," he wrote.
Crown's conduct was "systemic, longstanding and egregious", permeating the organisation and increasing the risks of money laundering and terrorism financing occurring within its walls, the judge said.
"(Its conduct) exposed Crown, its financial partners and the broader financial system to the risk of exploitation by organised crime and undermined the capacity of law enforcement to identify and respond to those risks, which placed the broader Australian community at risk."
Crown said that given its financial position, including a projected loss of $390m for the 2023 financial year, it would suffer "significant financial hardship" if it was force to pay the full amount right away.
Under the two-year instalment plan, Crown will pay $125m within 28 days, $125m within a year and $200m within two years.
The gaming giant will be required to provide its audited statements for the 2023 and 2024 financial years. If its position improved, AUSTRAC can apply to the court for a faster payment of the penalty.
Crown was also ordered to pay $3.4m to AUSTRAC for its legal costs of running the case.
The company's CEO Ciaran Carruthers apologised for the historical failings, saying they were unacceptable.
"There is no place for money laundering or terrorism financing at Crown or in our communities," he said on Tuesday.
The board and senior management in charge at the time of the contraventions has been removed and the company was bought by funds owned by Blackstone in an acquisition estimated to have been worth $8.9 billion.
Since 2020, Crown has spent an extra $40m to bolster its financial crime resources and has expanded its team by 170 employees, saying it had better controls to detect and prevent money laundering.
Acting AUSTRAC CEO Peter Soros said the $450m penalty was one of the highest globally issued against a casino.
"AUSTRAC is committed to ensuring all regulated businesses, as our first line of defence, do their part in the fight against financial crime and will not hesitate to take enforcement action when serious failings are identified.”
Federal Attorney-General Mark Dreyfus congratulated the financial regulator, saying the hefty fine sent a message to gaming companies.
"This order sends the clearest possible signal to the gambling and casino sectors that they must be vigilant to the risk of money laundering and terrorism financing and ensure they stop these criminals from using their services to launder the proceeds of their crimes," he said.
