Crown Resorts executive admits serious failings but denies turning ‘blind eye’ to laundering
15 Oct 2020

A senior Crown Resorts executive has conceded a litany of serious failures by the casino operator relating to alleged criminal activities, but insists it wasn’t deliberately turning a blind eye.

Deputy chairman John Horvath, previously a personal physician to the late Kerry Packer and chief medical officer of Australia, made a series of admissions at the NSW Independent Liquor and Gaming Authority inquiry on Wednesday.

The authority is determining whether Crown is fit to hold a gaming licence for the $2.4 billion Barangaroo development nearing completion after media allegations the company had facilitated organised crime and money laundering.

The bombshell reports included footage of a man unloading huge wads of cash from a blue cooler bag at a counter inside a room set aside for Suncity, Macau’s biggest junket operator, at the Southbank casino in Melbourne.

Junket operators identify high-roller gamblers, often known as VIPs, and make arrangements for them to travel to certain casinos, often by offering inducements such as free accommodation and transport.

The casino must report all transactions over $10,000 to financial crime regulator AUSTRAC within 10 days, but counsel assisting Naomi Sharp said “massive transactions” in the Suncity room had not been reported.

Ms Sharp asked Professor Horvath, who has been on Crown’s compliance committee, if he had been made aware that $5.6 million was found during an audit of the room in April 2018 and he replied he had not.

“Why wasn’t Suncity shut down at this time by Crown?” she asked.

“I can’t speculate on the reasons behind it but (it’s) a valid question,” Prof Hovarth replied.

She suggested the large amounts of cash were “red flags for money laundering”, which he agreed with, and that Crown had turned a blind eye to it.

“I don’t accept the turning a blind eye to it,” he responded.

“These are instances of failure by some staff to follow operational procedures that were clearly outlined in our undertakings to AUSTRAC.”

Ms Sharp asked Prof Hovarth if he was aware hundreds of millions of dollars passed through the accounts of Crown holding companies Southbank and Riverbank each year, and that banks including ANZ and Commonwealth Bank had shut some down in 2014 and 2019, respectively, due to concerns about money laundering.

He said he learnt about it through the inquiry.

“Should it have been brought to your attention?” she continued.

“It should have been brought to the compliance committee and risk committee,” Prof Hovarth said.

Chief legal and regulatory compliance officer Joshua Preston knew about the account closures but didn’t pass it on.

“It does concern me,” Prof Hovarth said.

Then chief financial officer and now chief executive Kenneth Barton also knew about them and didn’t tell Prof Hovarth.

“I have a concern that he did not understand the seriousness of the events,” the professor said, but insisted he still had confidence in Mr Barton.

“He erred in his judgment regarding the issues that you outline but other than that I have no reason to lose confidence in him.”

Nobody from Crown looked at the accounts until after Mr Barton gave evidence last month, Ms Sharp said, and again asked if the company had turned a blind eye to money laundering.

“I can’t accept that conjecture,” Prof Hovarth said.

“There was clearly a failure of systems and a failure to appropriately, by some people, do the due diligence, but I reject the concept of turning a blind eye, which would imply an active action.”

By Rebecca Le May, NCA NewsWire via, 14 October 2020


RiskScreen: Eliminating Financial Crime with Smart Technology

Advance your CPD minutes for this content, by signing up and using the CPD Wallet