AUSTRAC Opens Civil Penalty Proceedings against Star Entertainment

The Star does not appear to be taking a hiatus as AUTRAC, Australia’s financial crime agency, has taken civil sanctions against the group and its companies. The case has been brought in federal court against Star Entertainment Group and its subsidiaries, The Star Pty Limited and The Star Entertainment QLD Limited.

AUSTRAC Puts More Pressure on Star Entertainment

The proceedings aim to hold the company accountable for what the regulator sees as systematic violations of the country’s counter-terrorist financing and anti-money laundering laws. This is the latest move against the company that has emerged from the investigation. vs. Star from June 2021, now covering multiple states. AUSTRAC has released a detailed list of all failings for which it intends to hold Star Entertainment Group accountable, including lack of a transaction monitoring program to identify suspicious activity, lack of an adequate enhanced customer due diligence program, lack of AML/CFT with reasonable risk-based systems and controls and more. AUSTRAC similarly alleges that Star allowed customers to resort to payment options that further obscured their source and made it difficult for authorities to verify the basis of such funds, increasing the risk that those funds would be laundered or used for nefarious activities. Similarly, the regulator claimed Star did not raise enough concerns about some of its higher-risk customers and chose to maintain a relationship with them.

Nicole Rose, CEO of AUSTRAC, provided an update on why the process was initiated and what needed to happen to move forward. Rose said: Criminals will always try to take advantage of the financial system to launder their money and harm the community. As the first line of defense for our financial system and wards, businesses are often the first to become aware of criminal activity.

Star Committed to Changing Company Culture

The executive added that there were several issues with star companies that failed to perform proper customer due diligence and ended up operating without compliance for years. Star CEO and CEO Robbie Cooke said the company was taking steps to completely change its culture and improve its governance structure and processes that would ensure it is fully compliant with AUSTRAC and other regulatory requirements. “Our goal is to regain the trust of AUSTRAC and all of our regulators. We will continue to work with AUSTRAC to build a better, stronger, and more sustainable company,” concluded Cooke. Star faces parallel issues at 

 New South Wales and Queensland, where it was determined that the company was not authorized to hold licenses.

However, it is unlikely that Star Entertainment will lose its operating capacity or rights as it will most likely follow a Crown Resorts path and be subject to a particular regulatory regime. Upon completion, regulators will decide if Star can return to normal.