Australia’s financial intelligence agency AUSTRAC has opened civil proceedings against Mount Pritchard District and Community Club (Mounties) over alleged non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The financial watchdog alleges that Mounties failed to properly monitor its high-risk customers and that its AML/CTF program did not include sufficient risk assessment systems or controls.
AUSTRAC also criticised Mounties for outsourcing its responsibilities to Betsafe.
AUSTRAC CEO Brendan Thomas said that the operator’s approach to its obligations has left it open to criminal exploitation.
“Mounties is one of the largest and most profitable club groups in New South Wales. It owns 10 venues, eight of which operate approximately 1,400 poker machines, and it makes hundreds of millions of dollars in revenue from money gambled on those machines,” said Thomas.
“This is a big company with an even bigger responsibility to ensure its clubs are managing the risks that criminals can run dirty money through its gaming machines.”
Thomas added that Mounties should not be outsourcing its anti-money laundering and counter-terrorism finance obligations.
“Relying on third-party providers doesn’t absolve a business of its obligations under the AML/CTF Act. If a reporting entity outsources key parts of its program to a service that is not fit for purpose – especially without proper oversight or resourcing – they run a real risk of non-compliance.”
“All reporting entities, regardless of size, must stay actively involved in how their AML/CTF program is designed, implemented and monitored and I would say the same thing to other pubs and clubs who think bringing in a provider is a set and forget solution.”
The watchdog has also alleged that on several occasions, Mounties failed to appropriately monitor specific customers, despite the money laundering risks they presented.
Thomas added: “Customer due diligence and transaction monitoring in a club that processes hundreds of millions of dollars a year through its poker machines, a significant amount of which is cash, is going to require a robust approach when it comes to verifying a customer’s source of funds.”
The matter is now with the Federal Court of Australia to determine whether Mounties contravened Australian law and what actions, if any, are necessary.