Gaming company Tabcorp has been fined $45 million for breaching anti-money laundering and anti-terrorism financing laws. The Federal Court found that Tabcorp broke the law on 108 occasions over five years.

The fine imposed by the Federal Court is the highest civil penalty in Australian corporate history.

The multi million dollar fine was handed down after a civil penalty proceedings was brought against Tabcorp by AUSTRAC, the Federal Government’s financial intelligence and regulatory agency. In July 2015, AUSTRAC filed papers in the Federal Court against the three Tabcorp group companies for extensive, significant and systemic noncompliance with Australia’s anti-money laundering and counter-terrorism financing legislation

AUSTRAC CEO Paul Jevtovic addressed the media in Sydney yesterday, where he said that it sends an unequivocal message to gaming companies:

“There can be no doubt that this was a serious failure in the corporate governance and the size of the penalty reflects a consistent and extensive noncompliance. Quite simply Tabcorp failed in its obligations. The noncompliance arises from a corporate culture that is indifferent to money laundering and terrorism financing requirements,” he added. Cultures such as this put the community at risk with crimes committed by organised crime groups and “serious criminals” and others who could divert their “criminal wealth” to the “black market” and fund other illegal activities such as drug trafficking. Tabcorp failed to give AUSTRAC reports about suspicious matters on time or at all. Tabcorp has admitted these suspicions related to unlawful activity including money laundering and credit card fraud and has admitted that it had insufficient processes for consistent management oversight, assurance and operational execution of the money laundering program.”

Notably,  money laundering, terrorism and financing function was at times “underresourced” in the organisation and senior managers did not receive regular reports on the issue.

In a statement, Tabcorp chief executive David Attenborough confirmed the $45 million settlement and said the company had cooperated with AUSTRAC.

Key points:

  • The $45 million penalty is believed to be the highest in Australian corporate history
  • The Federal Court found Tabcorp failed to alert regulators to reports of suspicious behaviour on 108 occasions over more than five years.
  • Tabcorp has admitted that the suspicions related to unlawful activity including money laundering and credit card fraud, which was not reported to the Australian Transaction Reports and Analysis Centre (AUSTRAC).
  • Justice Perram found that in one case, Tabcorp failed to alert authorities to a customer who collected $100,000 in winnings.

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