The NSW gambling regulator has blocked Crown Resorts from opening its new $2.2 billion Sydney casino next month after a stunning 11th hour admission that criminals likely laundered dirty cash through the group’s bank accounts.
The chairman of the Independent Liquor and Gaming Authority, Philip Crawford, said on Wednesday he was “not comfortable” with Crown opening gaming operations until the Bergin inquiry into its licence is completed next year.
The James Packer-backed group planned to open the Barangaroo casino in the middle of December, but ILGA held an emergency meeting on Wednesday in light of the damning evidence about Crown’s operations presented to the NSW inquiry.
Mr Crawford said it was disappointing that Crown was “not picking up the vibe” and had not delayed the opening itself, with revelations about money laundering at Crown’s Melbourne and Perth casinos ILGA’s greatest concern. He said ILGA would not consider giving Crown the green light to open until it had Commissioner Bergin’s report, which she must deliver by February 1.
Crown put its ASX-listed shares into a trading halt before ILGA’s announcement. The authority’s decision came after Crown’s legal team performed a remarkable about-face and conceded to the Bergin inquiry that two Crown bank accounts had likely been used to launder the proceeds of crime.
Crown tendered new statements to the inquiry at 11pm on Tuesday, which enraged Commissioner Bergin and was a major factor in ILGA delaying the casino’s opening.
“It’s come at the 11th hour – literally. That gives us great concern because we’re talking about money laundering,” Mr Crawford said at a press conference.
“We’re talking about – potentially – drugs, we’re talking about child sexual exploitation, we’re talking about people trafficking and we’re talking about financing terrorism.”
Crown’s lawyers had previously urged Commissioner Bergin against finding that its bank accounts had, more probably than not, been used for money laundering despite being riddled with suspicious transactions. But Crown said in its submissions on Tuesday night that is likely what had occurred through accounts it opened through two shell companies called Southbank and Riverbank.
The use of the accounts to bank criminal funds was first exposed by The Age and The Sydney Morning Herald last year as part of a series of reports that triggered the ILGA inquiry.
“Crown accepts that there were funds deposited into the Riverbank and Southbank accounts that Initialism has found to be indicative of ‘cuckoo smurfing’ – it is indicative of a form of money laundering,” Crown’s counsel Robert Craig, SC, said.
“Crown accepts that an inference can be drawn that at some point in time deposits into the Southbank and riverbank accounts were more probable than not part of cuckoo smurfing.”
Counsel assisting the inquiry have argued that Crown’s failure to stop money laundering at its Melbourne and Perth casinos is one reason why it is unfit to keep the licence for its new $2.2 billion Sydney casino.
Crown’s 180-degree turn on Wednesday infuriated Commissioner Bergin, who demanded the company produce the legal advice that appeared to have told it not to conduct its own review into the suspected money laundering.
“What has happened over the last 12 months is that the counsel assisting have trawled through bank accounts with every single witness,” Commissioner Bergin said.
“And if this had happened – what happened last night at 11pm – that wouldn’t have been necessary.”
Commissioner Bergin said that in itself was relevant to her decision on Crown’s suitability to hold a casino licence in NSW.
The former Supreme Court judge said the legal advice Crown had received over the past 12 months was of “very serious concern”, including what appeared to be advice from Minter Ellison that Crown should not conduct the review of its bank accounts that led to Wednesday’s admission.
“This is in the face of an inquiry – the seriousness of it cannot be understated,” Commissioner Bergin said, while ordering that copies of the advice be produced.
“It is a most serious development.”
Mr Craig said Crown regretted that the updated evidence was produced only on Tuesday night, but said it was the result of a review which “we accept should have occurred earlier”.
The Southbank and Riverbank accounts which were set up for patrons to deposit money for use at Crown’s Melbourne and Perth casinos have become a major focus of the inquiry.
The inquiry has heard that ANZ closed the accounts in 2014 after they were used for a series of cash deposits indicative of money laundering. Crown did not review the suspicious transactions, but opened new accounts with the Commonwealth Bank.
CBA shut the new accounts last year after they were also used for a string of suspicious cash transactions.
The Bergin inquiry will continue tomorrow.