Australian Federal Police made the arrests after it was alleged that paying patrons were made to sign-over their winning cheques from electronic gaming machines. 

This has seen the ringleader, a Springvale south woman, 49, along with a man, 63, and a woman, 61, charged with dealing in money reasonably suspected of being the proceeds of crime and engaging in conduct in relation to money or property that was proceeds of general crime. The maximum penalty for the offence is 20 years’ imprisonment.

“Money laundering is the backbone of organised crime activity. Money is the sole reason organised crime exists and targeting how these groups get their ill-gotten profits into legitimate financial systems is a key priority for the AFP,” Acting Assistant Commissioner Raegan Stewart said.

“Licensed clubs and gaming venues should already be on notice that they are a significant risk for money laundering activities, and are often misused by individuals for criminal intent.

“Police target those seeking to profit from selling drugs or stealing from law-abiding citizens, but venues are reminded they cannot turn a blind eye to criminal activity – the risk and consequences for our communities are too high.”

AFP, assisted by the Victorian Gambling and Casino Control Commission, AUSTRAC and National Australia Bank, concluded a 12-month, multi-jurisdictional investigation this week.

This also saw investigators seize more than $170,000 in cash and gold bullions hidden inside the property. 

Police allege that the scheme saw punters paid in cash if they handed over their winning cheques, which would then be issued in the name of a syndicate member. This would later be deposited later into a bank and attributed as legitimate gambling winnings.

“Today we put the whole gambling industry on notice,” commented Annette Kimmitt, VGCCC CEO.

“This money laundering network would still be operating if it wasn’t for the forensic approach taken by our dedicated team of analysts and investigators, who put countless hours into reviewing data and footage, and conducting our own covert operations.

“This operation shows that as a new regulator with stronger powers we are watching the gambling industry closely and we will work with other agencies to actively pursue and shut down criminal activity.”

The AFP-led investigation began after an initial report from AUSTRAC, and found that the gaming venue allegedly issued an unusually high number of cheques compared to others. 

It was also found that 73 per cent of these were issued to a select group of patrons, all of which were suspected to be involved in or associated with those laundering illicit funds.

Investigations into the venue and its staff are ongoing, with any breaches of Victorian gambling laws potentially resulting in disciplinary action, ranging from fines to licence cancellation.

“Today’s operation demonstrates the benefit of AUSTRAC working closely with our law enforcement partners and using AUSTRAC’s sophisticated intelligence capabilities to uncover suspicious financial patterns,” noted Jon Brewer, AUSTRAC National Manager Law Enforcement and Industry.

“It is a timely reminder that money laundering can occur in any business without robust controls. This is why AUSTRAC’s role as both a financial intelligence unit and regulator is invaluable: we share our financial intelligence with law enforcement and regulatory partners to inform investigations, and we collaborate with industry to educate businesses to harden their processes to money laundering.”

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Dubbed the ‘China Union Pay process,’ this comes in relation to the findings of the state’s royal commission into the casino and entertainment operator, which found that the group had devised the ploy in a bid to evade Chinese currency restrictions.

The royal commission report described the process as “the use of the Chinese-based bank card, China Union Pay, to allow international patrons to access funds in order to gamble at Crown Melbourne,” which occurred between 2012 and 2016.

This, it is added, was devised due to restrictions imposed on Chinese nationals transferring money out of the country, with the process initially seeing the issuance of a room charge bill to patrons that falsely asserted that the hotel had provided services.

“The patron would pay the bill [using their China Union Pay card] and be given a voucher acknowledging receipt of funds,” the Victorian Gambling and Casino Control Commission confirmed.

“Then the patron, accompanied by a Crown VIP host, took the voucher to the cage and exchanged it for cash or chips.”

Actions available to the VGCC, which adds that it will make a further announcement once in has considered Crown’s response, include imposing a fine of up at A$100m, varying its casino licence, and/or censuring the company and directing it to take rectification steps.

Fran Thorn, VGCCC Chair, explained: “I welcome the legislative amendments which impose stronger regulatory obligations on Crown and provide the VGCCC with greater enforcement powers. These powers are needed to deter Crown from engaging in the conduct that was revealed during the royal commission.

“As a first step, we are acting on the royal commission’s findings that Crown’s China Union Pay process breached important Victorian regulatory obligations, was illegal and constituted serious misconduct.”

In a statement, Crown says that it will “fully cooperate” with the VGCC “on this and any other matters arising from the Victorian royal commission report”.

During 2021, a royal commission was conducted into the company which found that Crown Melbourne is unsuitable to hold its casino licence and contravened several of its obligations.

However, the group retained its Melbourne casino licence, despite the royal commission deeming Crown “unsuitable” on the basis that it engaged in “illegal, dishonest, unethical and exploitative” conduct.

In response, 33 recommendations were issued, including a special manager being appointed to oversee the company’s reform agenda, before suitability will again be assessed after a two-year period.

This followed a ruling along the same lines being made in New South Wales, with a Western Australian royal commission also recently reporting similar findings. 

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In a statement, Crown noted that it had “carefully considered the proposal”, including obtaining advice from its financial and legal advisors, as well as considering feedback from shareholders and regulators. 

The company stressed it is currently focused on “maximising value” for its shareholders and will “carefully consider any proposal that is consistent with this objective”.

Despite turning down the offer, Crown has offered Blackstone the opportunity to access non-public information to allow it to “undertake initial due diligence inquiries” on a non-exclusive basis so it can “formulate a revised proposal that adequately reflects the value of Crown”.

Last month, Blackstone revived its interest in the embattled Australian casino operator, returning with an offer of A$12.50 per share.

This proposal follows a pair of prior overtures made by the US investment management firm, and affiliates, earlier in the year, which valued the group at A$12.35 per share after an initial A$11.85 offer was deemed an undervaluation and “not in the best interests” of shareholders.

At the time, Crown stated that it has “not formed a view on the merits of the proposal,” adding that it will assess the submission.

Furthermore, Blackstone noted that the rejected proposal was subject to an array of conditions, including the group conducting due diligence on Crown, covering regulatory, commercial, operational, financial, taxation, legal and accounting matters, on an exclusive basis.

In addition, any potential acquisition of Crown would also be dependent on Blackstone receiving final approval from the casino regulators in each of Victoria, New South Wales and Western Australia.

Blackstone highlighted earlier this month that it would be prepared to proceed with the proposed transaction amid an ongoing Perth royal commission and consultation process with the NSW Independent Liquor & Gaming Authority, in addition to legislation to implement the recommendations of the Victorian Commission. The company also stressed at the time that “the consequences or outcomes of these processes may impact the proposed transaction”.

The ongoing negotiations have continued over the backdrop of Crown Resorts being deemed ‘unsuitable’ by the royal commission on the basis that it engaged in “illegal, dishonest, unethical and exploitative” conduct – yet still retained its Melbourne casino licence. 

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The company says that it expects “to recover a significant portion of the settlement amount from its insurers but cannot at this stage be certain about the outcome of negotiations with insurers, or the outcome of any necessary formal steps for recovery it may need to take”.

The $125m settlement, inclusive of interest and costs, was initiated by the firm’s board of directors as a “commercial decision made in the best interests of Crown and its shareholders”.

The proceeding alleged that “Crown knew its employees were acting illegally in China and were subject to a Chinese government crackdown, and that Crown enacted a range of counter surveillance activities including using code words on telephone calls, removing logos from its private jets and misleading Chinese authorities”.

Michael Donelly, senior associate of Maurice Blackburn, explained: “Crown’s alleged failures in our case were part of what has become one of the most serious and comprehensive breakdowns in corporate governance in Australian history

“This case demonstrates the importance of class actions, whistleblowers and investigative journalism in holding corporations to account. Without those things, we doubt that the three separate royal commissions into Crown would have been established.”

Adding: “It’s important to understand that if the Morrison government changes to the Corporations Act and class action laws are fully implemented, this is precisely the case that would be unlikely to occur. 

“Rather than taking orders from business lobbyists, the government should be focussed on protecting investors’ rights to take action against corporate wrongdoers.”

The embattled casino firm has been plagued by allegations that it, or its agents, affiliates or subsidiaries, engaged in money-laundering; breached gambling laws; and partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups.

Earlier this week, Crown Resorts retained its Melbourne casino licence, despite a royal commission deeming the group to be “unsuitable” on the basis that it engaged in “illegal, dishonest, unethical and exploitative” conduct.

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Raymond Finkelstein, the commissioner who led the investigation, addressed “disgraceful” conduct dating back many years, adding that it is “difficult to grade the seriousness of the misconduct” as well as that “the catalogue of wrongdoing is alarming”.

However, despite this, one of a slew of recommendations includes not striping the casino operator of its licence as “immediate cancellation of the licence is not in the interests of the Victorian community”.

This, the report says, would cause a risk of “significant harm” to the region’s economy, with the Commission also believing that Crown Melbourne “has the will and the capacity to reform itself so that it again becomes a suitable person to hold a casino licence”.

It has instead suggested, in one of 33 recommendations, that a special manager be appointed to oversee the company’s reform agenda, with the individual in question to operate the post for a two year period.

Following the time frame, the onus “will be on Crown to clearly demonstrate through its operations and the progress on its reforms why its licence should not be cancelled,” with cancellation to ensue unless that regulator is satisfied of the firm’s suitability.

Furthermore the report also finds that Crown “facilitated money laundering” through a subsidiary’s bank account, as well as failing “to investigate warnings about potential money laundering through that account over many years”.

Finkelstein adds that evidence of unpaid tax was also found, stating that “more is likely due” than the A$61.5m in back taxes and interest already paid, with executives also doing “nothing” despite being warned of a crackdown of the illegal promotion of gambling in Australia to Chinese residents.

“Despite knowing that staff who worked in Indonesia, Malaysia, Taiwan and Singapore were also likely contravening their local laws, Crown let them carry out promotional activities as the chance of them being charged was not significant,” the report stated. “To have done so after the China arrests is nothing short of appalling.”

The operation of junkets, which Crown has already ceased, is recommended to be banned, with the state government to also increase the maximum possible penalty under the Casino Control Act 1991 from A$1m to A$100m. The royal commission had indicated that an increase should be made to “at least” A$10m.

Further Finkelstein findings include “consistent patterns of noncooperation with the regulator,” including bullying, providing it with false or misleading information, delaying the investigatory process and frustrating the regulator’s investigations.

A limit of shareholding to enable no person to have or acquire a relevant interest of five per cent of more is also suggested, with James Packer, through CPH Holding’s 37 per cent Crown stake, being “responsible for much” of the enterprise and retaining “significant control over Crown affairs, even after his resignation as chair of the board and as a director”.

Serious, systemic breaches of responsible gambling obligation were also discovered, an issue which Finkelstein called “perhaps the most damning discovery by the Commission”.

This includes the way in which the company is said to have dealt “with the many vulnerable people who experience gambling harm”.

The Victoria state government says that it supports the recommendations “in principle,” subject to further detailed analysis and consultation being undertaken. 

Crown commented that it is currently undertaking its own review of the report and the Victorian government’s response, but “will work cooperatively and constructively” in relation to the findings and recommendations.

The launch of a royal commission came after a scathing report in New South Wales, commissioned by the ILGA and led by former supreme Court judge Patricia Bergin, found that the company isn’t fit to operate the $2.2bn Crown Sydney Hotel Resort.

The almost 800-page critique of Crown’s suitability, which itself followed allegations raised by Australia’s Nine Network, the Sydney Morning Herald, The Age and other media outlets, alleged that Crown, or its agents, affiliates or subsidiaries, engaged in money-laundering; breached gambling laws; and partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups. 

A short time after Victoria initiated its investigation, Western Australia upgraded its own inquiry to a royal commission, which it said will also look at the state’s regulatory framework, including any actual or perceived conflicts of interest by officers involved in casino regulation, and any matters that might enhance the Gaming and Wagering Commission’s future capability and effectiveness.

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This sees Melbourne join the country’s other two largest cities of Brisbane and Sydney in enforcing such measures, as it bids to combat the spread of the Delta variant.

Crown Resorts confirmed the changes to its operations in Melbourne after the Victoria government imposed a seven day lockdown, which it is said will be in effect from 8pm on August 5, 2021 until 11:59pm on August 12, 2021.

This has seen gaming activities ending once more, with food & beverage, retail, banqueting and conference facilities, other than for the provision of takeaway meals or meal delivery services, also ending. Hotel accommodation will continue to be provided for approved purposes.

Crown Melbourne also resumed hotel and food and beverage operations, except those located on the casino floor, at the beginning of last month, with gaming subsequently following on July 28.

Restrictions imposed following that recent easing of restrictions included limiting the maximum capacity in each indoor space to 100 patrons, or the number permitted by the density quotient of one person per four square metres. Physical distancing and hygiene protocols remain in place.

However, with these now tightened coming into place just eight days later, Crown updates that it will “pay Crown Melbourne employees’ rostered hours and salaries (as applicable) over the 7-daylockdown period”

It adds: “Crown Melbourne will continue to work closely with the government and health authorities in Victoria and will respond to measures taken in relation to COVID-19”.

The restrictions put in place by the Victoria government mean that residents may only leave their home for shopping for necessary goods and services, caregiving or compassionate reasons, including medical care or to get a COVID-19 test, authorised work or permitted education, exercise (once a day for 2 hours), or to get a COVID-19 vaccination.

You must stay within 5km of your home for shopping and exercise, although this does not apply to permitted work or education, when giving or receiving care, getting a COVID-19 vaccination or visiting a partner or your single social bubble buddy. Face masks must also be worn indoors and outdoors whenever leaving the home.

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However, the casino operator, which last week resumed the gaming operations of its Melbourne property after a range of restrictions were lifted across Victoria, also announced that Walsh will remain available to assist the company until his employment at Crown ends on December 9, 2021. 

Walsh joined Crown in 2008, working on secondment as the chief operating officer of Cannery Casino Resorts, which operated in Nevada and Pennsylvania in the US, before returning to Australia in 2013 to assume the position of chief operating officer of Crown Melbourne. In December 2020, he was appointed as Crown Melbourne CEO

The company says that it will announce an interim appointment for the role of CEO Crown Melbourne following consultation with the Victorian Commission for Gambling and Liquor Regulation.   

This comes after the Victoria government allocated additional time and funding to the royal commission into the Melbourne operations of the group to investigate “a wider range of matters”.

Commissioner Raymond Finkelstein wrote to James Merlino, Victoria’s acting premier, to request an extension from August 1, 2021, to October 15, 2021, as well as an increase in the Commission’s funding from $10m to $19.75m, which was subsequently granted.

Among the wider range of matters to be investigated include those relating to the corporate culture at the Melbourne property, gambling harm minimisation, and claims brought forward in evidence so far, such as allegations that the venue underpaid casino tax.

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Commissioner Raymond Finkelstein wrote to James Merlino, Victoria’s acting premier, to request an extension from August 1, 2021, to October 15, 2021, as well as an increase in the Commission’s funding from $10m to $19.75m, which was subsequently granted.

“We established this royal commission to get the answers we need about Crown – and this extension will ensure the scope of evidence provided so far is able to be thoroughly considered,” Merlino said.

Among the wider range of matters to be investigated include those relating to the corporate culture of Crown Melbourne, gambling harm minimisation, and claims brought forward in evidence so far, such as allegations that the venue underpaid casino tax. 

Extending the timeframe of the royal commission has been done in a bid to ensure that the significant information provided regarding Crown Melbourne’s suitability to hold the casino licence is examined thoroughly and appropriately. 

It will also allow time to prepare and examine the requested documents, and for the sufficient consultation with relevant and interested parties to be undertaken.

Melissa Horne, minister for consumer affairs, gaming and liquor regulation, added: “The evidence we have seen coming out of the royal commission to date is significant – we’ll provide the commissioner with the resources and time required to complete this important work as requested.”

The Royal Commission was established in February to ensure that those who hold a casino licence in Victoria uphold the highest standards of probity and integrity. 

This came after a scathing report in New South Wales, commissioned by the Independent Liquor and Gaming Authority and led by former supreme Court judge Patricia Bergin, found that the company isn’t fit to operate the $2.2bn Crown Sydney Hotel Resort.

The almost 800-page critique of Crown’s suitability, which itself followed allegations raised by Australia’s Nine Network, the Sydney Morning Herald, The Age and other media outlets, alleged that Crown, or its agents, affiliates or subsidiaries, engaged in money-laundering; breached gambling laws; and partnered with junket operators with links to drug traffickers, money launderers, human traffickers, and organised crime groups. 

A short time after Victoria initiated its investigation, Western Australia upgraded its own inquiry to a royal commission, which it said will also look at the state’s regulatory framework, including any actual or perceived conflicts of interest by officers involved in casino regulation, and any matters that might enhance the Gaming and Wagering Commission’s future capability and effectiveness.

Helen Coonan, Crown’s executive chairperson, said: “As executive chairman, I have made clear that any shortcomings identified by the royal commissions will be addressed. 

“The board and I are committed to making Crown a stronger, more transparent and respected company. We have initiated a sweeping program of significant reforms, enhancements and personnel changes.

“We cannot change the past, but we can be absolutely steadfast in the approach we take to driving the culture and transparency of the company into the future”.

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This comes as the group faces yet more criticism for responsible gambling failures, with media outlets reporting that a Royal Commission inquiry has been informed that gamblers via the group’s land-based establishments could be left to play unchecked for at least 12 hours. It was also heard that one individual played for over 34 hours straight at its Melbourne site, before being forced to break.

Victoria’s latest lockdown extension follows an outbreak of 12 new cases acquired locally in a 24 hour period last week, which took its total number of active cases to 34, and subsequent advice from the public health team to implement constraints.

The area now has 69 active cases and more than 350 exposure sites, with Merlino warning that the variant of the virus being faced, now named Kappa by the World Health Organisation, “is quicker and more contagious than we’ve seen before”.

“I’ll say from the outset, this won’t be what everyone hoped for – but these are the responsible and proportional adjustments we can make now, while continuing to keep our regional communities safe,” Merlino said in a statement.

In the state capital of Melbourne, people can only leave home when shopping for food and supplies, or for authorised work and study; care and caregiving; exercise; and getting vaccinated. People will be able to travel further for exercise and shopping, with an expanded 10km radius, up from 5km.

Limits on masks remain the same, meaning they must be worn indoors and outdoors, while in-person education has been expanded to include those in year 11 and 12, and a number of additional outdoor jobs have been added to the permitted list.

Outside of Melbourne, where it is hoped that a careful easing from restrictions will commence from next week, regional restrictions will be easing from today following “no community transmission in regional Victoria this week”.

This will see travel restrictions and the aforementioned five reasons lifted; all year levels will return to face-to-face schooling; public gatherings will increase to ten people, restaurants and cafés can reopen to a maximum of 50, retail, beauty and personal care, entertainment venues and community facilities will also open in line with capacity limits; with offices capped at 50 per cent.

However, it is warned that visitors to the home are still not okay, and that masks still need to be worn inside. Regional Victorians will be able to travel in regional Victoria, while Melburnians will not.

At the Crown Melbourne site, gaming activities and food & beverage, retail, banqueting and conference facilities, other than for the provision of takeaway meals or meal delivery services, will all remain suspended. Hotel accommodation will continue to be provided for approved purposes. 

Crown says that it will continue to support staff financially, and will “work closely with the government and health authorities in Victoria and will respond to measures taken in relation to COVID-19.”

Merlino added: “No one wants to be here. And I know this news is tough for every Victorian, every family and every business in this state. But the chief health officer has no choice but to give this advice. And the government has no choice but to follow it.

“If we don’t, this thing will get away from us and people will die. No one wants to repeat last winter. To stop that from happening, we need every Victorian to follow the rules, to get tested and to get vaccinated when it’s your turn. We can do this, but we need to do it together.”

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On the advice of its public health team, James Merlino, Victoria’s acting premier, updated that the region would implement the added restrictions from 11:59pm on Thursday, 27 May, 2021, until 11:59pm on Thursday 3 June, 2021.

This comes just days after the return of other rules, which included private gatherings in the home being limited to five visitors per day, public gatherings limited to 30 people and face masks needing to be worn indoors, unless an exemption applies.

A number of other Australian states, such as Queensland, Western Australia, and Tasmania, have closer borders with Victoria, and an announcement is expected from New Zealand regarding its travel corridor arrangement.

The region reported 12 new cases acquired locally in the past 24 hours, which takes its total number of active cases to 34. In total, Australia has recorded a little over 30,000 cases and 910 deaths.

Merlino stated: “As we’ve seen here, and across Australia, this kind of short, sharp action is effective in stopping this thing in its tracks. Our public health experts’ prime concern: just how fast the B1.617.1 variant is moving.

“Overseas, they haven’t been able to track how quickly this version of the virus can move. Here in Victoria, though, we’re seeing not only how quick it is – but how contagious it is too.”

Adding: “We’ve seen other countries come up against these variants and lose. Badly. Places like Taiwan that have gone from no or very low cases to skyrocketing numbers in the space of just days and weeks – and now are struggling to get it under control.

“We also know our nation’s vaccine rollout has been slower than we’d hoped. And if more people were vaccinated, we might be facing a different set of circumstances. Sadly, were not.

“If we make the wrong choice now, if we wait too long, if we hesitate too much, this thing will get away from us. And lives will be at risk.”

Residents will be able to leave home for one of five reasons, food and supplies; authorised work; care and caregiving; exercise, for up to two hours and with one other person; and getting vaccinated.

Exercise and shopping is limited to five kilometres from home, or those closest to you, with the latter permitting only one person per day, per household. Face masks will also need to be worn inside and outdoors, except in your own home.

Childcare remains open, however, schools must close for those other than for the children of authorised workers and vulnerable.

Shops such as supermarkets, food stores, bottle shops, banks, petrol stations and pharmacies will also remain open. Cafes and restaurants will be able to offer take-away only. Gyms, hairdressers, community facilities and entertainment venues will all close. Non-essential retail may only open for click and collect.

Hotels and accommodation can only stay open to support guests already staying onsite, but no new bookings can be made unless it’s for one a permitted purpose, like authorised work. 

Crown Melbourne updates that it will continue to provide hotel accommodation for approved purposes, with employees to continue receiving rostered hours and salaries. 

Operations that will cease at the group’s entertainment complex include gaming activities; and food & beverage, retail, banqueting and conference facilities other than for the provision of takeaway meals or meal delivery services.

“Crown Melbourne will continue to work closely with the government and health authorities in Victoria and will respond to measures taken in relation to COVID-19,” the group closed.

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