Perth Court Hears of WA Regulator Incompetence in Crown Case
A court in Perth has heard how Crown Resorts had enjoyed and exploited extraordinary levels of trust in the buildup to the money laundering scandal. Crown Resorts was able to exploit the trust and oversight placed in them to enable nefarious activities to go ahead unchecked. Prosecutors investigating the case against the Australian casino conglomerate have accused the regulator of not being suspicious enough as the money laundering scandal erupted.
Perth in Western Australia is the city in which Crown Resorts committed multiple criminal acts within its venue. These include money-laundering, tax evasion and a potential corruption suit due to its close ties with the regulator meant to prevent such issues in the first place. ©akenarinc/Pixabay
The Western Australia Department of Local Government, Sport, and Cultural Industries appointed a new chief executive to lead the inquiry in Lanie Chopping. In one of her first addresses to the new commission, she criticized her predecessor Duncan Ord for his lack of scrutiny over serious red flags being raised with Crown’s operational activities.
Clearly, there had been a series of shortcomings with the regulator’s approach to its responsibilities and taking on Crown Resorts over their systemic shortcomings is something the regulator will be hoping to eradicate in the future of the industry. It’s clear that the regulator had failed to spot signs of money laundering at Crown Resorts, ignoring multiple red flags and ‘fell asleep at the wheel’.
Another executive branch in Australia now being dragged into the conflict is the Gaming and Wagering Commission. The excessive levels of trust placed in Crown Resorts’ financial integrity units by these entities have caused a lot of controversies. Investigators have stopped short of accusations of corruption, but it’s clear that this is the direction the case will now begin to take. Following a significant restructuring of the department, the message from the Gaming and Wagering Commission is that they’re in a healthy spot once again.
Gaming and Wagering Commission to Restructure and Evolve
The new commissioner in charge of the principal gambling in Australia, Ms. Chopping, has said that her organization, the Gaming and Wagering Commission will need to undergo a period of self-reflection to evolve with the modern standards of the industry. But more specifically, the GWC has publicly stated that it will need to revise the way it regulates Crown Casino, as this task has been woefully under-fulfilled up until now.
In terms of implementing a better set of control measures at Crown Casinos, there will undoubtedly need to be a major hiring push at the venue. Bringing qualified and experienced inspectors into the business will certify that the operations are running in a legal way. More staff to act as a separation of powers will improve the integrity issues at Crown and could be the key for regulators to rekindle their trust in the operator once more.
The probes into Crown were sparked by the infamous inquiry by the New South Wales Independent Liquor and Gaming Authority. The investigators found that Crown Resorts had systemically facilitated money-laundering via the Asian high-roller junket operators at their venues in Perth and Melbourne. Junket operators such as SunCity are agencies that help wealthy Chinese citizens transfer their money out of the country in order to gamble at foreign casinos. These services are in high demand due to China’s strict controls on the movement of its currency across the border.
Furthering on this investigation, the Western Australia royal commission heard how the personal friendships between senior Crown and regulatory staff had created an environment easily exploitable for corruption. These were friendships between executives at the regulator and directors on the legal & compliance division of Crown, and those involved were said to vacation together, regular exchange informal emails and generally look out for each other’s best interests.
Crown Investigated for Tax Avoidance in Victoria
To add to the long rap-list of Crown Resorts over the past few years is the possibility of the firm owing hundreds of millions of dollars in unpaid tax. Following years of concealed earnings, poorly kept financial records, and a culture that enabled nefarious actors to flourish, Crown Resorts may have escaped paying $270M in tax debts.
Confronting the allegations throughout the summer, Crown has told the regulator that it has already made a payment back to the tax authorities totaling $61M, this includes nearly $24M in penalty interest based on the unpaid deductions the casino had wrongly attributed to pokies punters in 2012 financial year-to-date.
A full investigation is likely to be completed in the coming weeks and months regarding the exact financial situation at Crown. Auditors will comb through the financial statements through the period where unpaid taxes are suspected of arising, and necessary actions will be taken based upon those findings. There is more work to be done and a resolution is expected to be reached soon.
