The proceedings come after AUSTRAC first launched a compliance campaign in September 2019, which led to an enforcement investigation into The Star Pty Limited being opened in June 2021. In January 2022, the investigation was expanded to include The Star Entertainment Qld Limited and other The Star entities.

A statement from AUSTRAC confirmed its allegations against the entities include that it:

“Failed to appropriately assess the money laundering and terrorism financing (ML/TF) risks they faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time; did not include in their AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to which The Star entities were reasonably exposed; and, failed to establish an appropriate framework for board and senior management oversight of the AML/CTF programs.”

Further, the allegations allege The Star entities “did not have a transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of The Star entities; did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers [and] did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks”.

Consequently, in the absence of appropriate ML/TF risk oversight, AUSTRAC will allege that The Star entities “permitted their customers to move money through payment channels that were non-transparent and involved high ML/TF risks; did not understand the sources of money moving through these channels or whether there was a risk that the source of funds was illicit; and, failed to consider whether it was appropriate that they continue an ongoing business relationship with higher risk customers”.

“In the absence of these risk-based controls, The Star entities were vulnerable to criminal exploitation. [The] Star’s failure to manage the ML/TF risks of its business, in turn, exposed the Australian and global financial system to systemic ML/TF risk over many years,” AUSTRAC’s statement added.

The statement of claim does not detail the quantum of the penalty to be sought by AUSTRAC.

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Commenting on the matter, AUSTRAC chief executive Nicole Rose said casinos must take their anti-money laundering obligations seriously to protect Australia’s financial system, their business and the community from criminal exploitation.

“Criminals will always seek to exploit the financial system to launder their money and harm the community,” Ms Rose said.

“AUSTRAC’s investigation identified a multitude of issues, including poor governance and failures of risk management and to have and maintain a compliant AML/CTF program.

“The Star entities also failed to carry out appropriate ongoing customer due diligence, which has led to widespread and serious non-compliance over a number of years.”

Following the proceedings being commenced in the Federal Court, The Star’s managing director and CEO Robbie Cooke issued an ASX statement, noting: “We are transforming our culture, transforming our business. We are committed to improvement, but there is a lot still to do.

“Our goal is to earn back the trust and confidence of AUSTRAC and all our regulators.

“We will continue to work with AUSTRAC as we build a better, stronger and more sustainable company.”

This latest news comes after The Star Entertainment Group was hit with a second class action earlier this month. Filed by Maurice Blackburn in the Victorian Supreme Court, the class action alleges that The Star engaged in misleading and deceptive conduct to the detriment of members and shareholders.