https://www.smh.com.au/business/companies/coonan-admits-crown-facilitated-money-laundering-at-casino-20201020-p566ph.html

Crown Resorts chairman Helen Coonan has conceded the casino giant facilitated money laundering at its Melbourne casino, but blamed it on "ineptitude" rather than the company deliberately "turning a blind eye" to criminals banking their dirty cash with the company.

The comments made in evidence to the NSW Independent Liquor and Gaming Authority’s probity inquiry into Crown on Tuesday came a day after the financial crimes watchdog, AUSTRAC, said it was formally investigating Crown for potential breaches of anti-money laundering laws.

During her second day of evidence at the inquiry, Ms Coonan was asked about Crown’s relationship with its largest high-roller "junket" tour partner, Suncity, which is run by the alleged former Macau triad member Alvin Chau.

Suncity operated a private gaming room at Crown Melbourne up until late last year when the Macau-based junket shut it down following reports in The Age, Sydney Morning Herald and 60 Minutes about Mr Chau's criminal links. That series of reports triggered the ILGA inquiry, which will recommend whether Crown should keep the licence for its new Sydney casino at Barangaroo.

Counsel assisting the inquiry, Naomi Sharp, SC, challenged the former Howard government minister on why Crown did not shut Suncity's private room even after multiple red flags were raised that indicated money laundering was occurring within the gaming parlour.

Those red flags included 2017 footage – leaked by Tasmanian independent MP Andrew Wilkie – of tens of thousands of dollars in cash being taken from a blue cooler bag and exchanged for chips; AUSTRAC querying Crown in 2017 about why it was working with Mr Chau, given his apparent criminal background; and a Crown audit discovering $5.6 million in cash stored in a cupboard in the private room in 2018, in breach of a $100,000 cash limit.

"Isn’t this a quintessential example of Crown Resorts turning a blind eye to the prospects of money laundering occurring at its casino?" Ms Sharp asked.

"It may have been ineptitude or a lack of attention," Ms Coonan said. "I don’t think it was deliberately turning a blind eye. I do think that’s a different adjectival conclusion."

Commissioner Patricia Bergin, SC, asked whether she would agree that it was "facilitating" money laundering, which Ms Coonan initially said was "difficult to agree with".

Commissioner Bergin said that, even assuming the failure was the result of "ineptitude" and "lack of attention", Crown's failure to stop the suspicious activity occurring could lead to a situation where people knew they could launder money at Crown.

"The community loses because you’ve got money laundering in your casino; and Crown loses because it’s seen as an inept company lacking in attention," she said.

"And … the bystander could reasonably conclude that this conglomerate of ineptitude, lack of attention and failing to intervene facilitated money laundering. Would you not agree with that?"

"Yes," Ms Coonan said. "It was the turning the blind eye that I didn't agree with, which I think is a different degree of understanding."

Asked later to confirm her view, Ms Coonan added that Crown's failings had "enabled" money laundering.

Ms Coonan said Crown had dealt with junket partners in the past who were not of "good repute", including under her watch as a Crown director since 2010.

The closure of Australia's borders due to COVID-19 has brought Crown's international VIP business to a standstill. Ms Coonan said Crown would either have higher due diligence standards for junkets or not work with them at all.

Ms Coonan said she was confident Crown was "ready and suitable" to open its new $2.2 billion casino at Sydney's Barangaroo in December, with improvements underway at the group including the recruitment of a new "head of compliance and financial crimes" to oversee its under-resourced anti-money laundering team.

Commissioner Bergin will not hand down her findings on Crown's suitability to hold a NSW casino licence until February.

AUSTRAC chief executive Nicole Rose told a Senate hearing on Tuesday that the financial crimes watchdog had launched a compliance assessment at Crown in September 2019 and had forwarded that assessment to the AUSTRAC enforcement team. "We have some serious concerns and junkets are certainly one of those concerns," Ms Rose said.

Board not responsible, 'disappointed' in CEO

Ms Coonan, who took over as chair in January after a decade as a director, declined to accept the board was responsible for Crown’s failings, insisting that fault lay with Crown’s management.

"The board can set a proper risk appetite…. and there can be failings in how it’s implemented," she said.

Ms Coonan said she was disappointed in Ken Barton, Crown’s long standing finance boss who was appointed CEO in January, who had shown poor judgment through his involvement with Crown bank accounts repeatedly used to make suspicious transactions, and which he tried to keep open in late 2019 even when banks wanted to shut them over money laundering concerns.

"However I think that Mr Barton has shown a keen appreciation of the need for change," she said. "He’s the best person to drive those [changes] together with the board’s supervision."

Ms Coonan dismissed the media reports that triggered the powerful ILGA inquiry at Crown’s annual shareholders meeting in October last year as "unsubstantiated and unproven".

She told the inquiry on Tuesday that she and her fellow directors only started what Ms Sharp called a "process of reflection" that led to her realisation something had gone wrong at the company towards the end of the year, when several regulators and law enforcement bodies started to probe the issues, or more than three months after the media exposé was published.

Ms Coonan also agreed with Commissioner Bergin that Crown should have apologised to Jenny Jiang, one of its employees jailed in China in 2016 and who retold her horrific four-week experience in the media reports, rather than attacker her as a "gold digger" who was seeking a payout from the company in the newspaper ads.

She said she did not know how much Ms Jiang's annual salary was, but Commissioner Bergin assured her that the executives of James Packer's private company who sat on Crown's board "would have been able to make it in a month on their retainers".

"That's quite likely," Ms Coonan said.

Crown shares tumbled 8.2 per cent to $8.25 on Monday after AUSTRAC's enforcement probe was announced. Law firm Maurice Blackburn, which is already running a class action against Crown for shareholder losses stemming from the arrest of 19 staff in China in 2016, said on Tuesday it would look at additional action from Monday's stock dive. Crown shares bounced back to 1.2 per cent to $8.35 on Tuesday.

The inquiry will continue its public hearings on Wednesday with ex-Crown director and former Qantas boss Geoff Dixon to give evidence.