Tabcorp was fined the highest civil penalty in Australian corporate history, $45 million, for the breach of money laundering and terrorism financing laws as a result of a civil action launched by Australian Transaction Reports and Analysis Centre (AUSTRAC). Justice Perram in the Federal Court found that Tabcorp breached the AML/CTF Act on 108 occasions over a period of more than five years including a lack of a compliant AML/CTF program, failing or late provision of suspicious matters reports (105 occasions), identification of a customer who collected $100,000 in winnings and late enrolment with AUSTRAC.
AUSTRAC advises the financial and gambling sector to take AML/CTF obligations seriously and AUSTRAC will enforce and take action against those of significant and systemic non-compliance.
Paul Jevtovic, CEO, AUSTRAC, emphasises that “Boards and senior management across all industries should take note to ensure that they are fully informed of their AML/CTF compliance”.
In 2015, a Sunday Age investigation reported alleged major security flaws with Tabcorp’s betting system allowing customers to open anonymous accounts that could be used by criminals to store and transfer funds around the country.
In the last three years, in cooperation with AUSTRAC, Tabcorp has made significant enhancements to their AML/CTF program and ensure its compliance. The organisation has employed a Chief Risk Officer and established a Financial Crime Risk team, while expanding their AML/CTF team. An automated transaction monitoring and improvements in regulatory reporting processes have been introduced. In addition, AML/CTF refresher training is provided to 29,000 people across employees and retail outlets.
The half year report to December 2016 disclosed the company had spent $20 million on the civil proceedings. AUSTRAC estimates the total financial costs of the proceedings to be in the range of $90 million, which includes AUSTRAC’s agreed court costs. Tabcorp’s share price appeared to be largely unaffected by the decision with the disclosure pre-empting the impacts on the company’s performances.
AUSTRAC press conference regarding Tabcorp 16/3/17:
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