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Crown’s internal AML controls described by inquiry judge as a “debacle”

The judge overseeing an inquiry into Crown Resorts’ suitability to hold a NSW casino license has described the company’s internal anti-money laundering controls as a “debacle.”

Commenting on the proceedings this week as Crown CEO Ken Barton took the stand, Commissioner Patricia Bergin questioned comments made by Barton that he was unaware of deposits and transfers being made in junket rooms located within its own casino at Crown Melbourne.

She also wondered how the Victorian gaming regulator was supposed to keep track of happenings within Crown Melbourne’s walls if its own management didn’t know.

“This is what’s troubling me,” Bergin said. “There has to be some more transparency because this, in effect, has really reached the debacle level.

“At the moment it is just extraordinarily troubling.”

The inquiry, being held by the NSW Independent Liquor and Gaming Authority, follows last year’s planned sale by Crown’s largest shareholder, James Packer, of a 19.99% stake in the company to Melco Resorts. Melco ultimately backed out of acquiring the second half of that stake before earlier this year offloading the 9.99% it did acquire.

With Melco no longer involved, the inquiry is now focusing on allegations aired via certain Australian media outlets last year questioning Crown’s AML controls, among other things, given its use of Asian junkets allegedly linked to organized crime.

The NSW Independent Liquor and Gaming Authority said at the time that these reports “raised various allegations into the conduct of Crown Resorts and its alleged associates and business partners and raised questions as to whether the Licensee remains a suitable person to hold a restricted gaming license for the purposes of the Casino Control Act.”

Crown is due to open its AU$2.2 billion VIP casino, Crown Sydney, later this year where it is assumed junkets will play an important role in introducing high rollers.

According to the Australian Financial Review, it was also claimed during the inquiry this week that Packer’s right-hand financial man, Michael Johnston, had tried to alter Crown’s financial forecasts to potentially benefit the company’s largest shareholder ahead of the sale of shares to Melco. Johnston was a board member of both Crown and Packer’s Consolidated Press Holdings.

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