Record Civil Penalty Ordered Against Tabcorp after Prosecution by New Serious Financial Crime Organisation
Friday 17 March 2017 @ 1.03 p.m. | Corporate & Regulatory | Crime | Legal Research
Yesterday (16 March 2017), the Federal Court delivered judgment awarding the biggest civil penalty ever recorded of $45 million against Tabcorp, after 108 contraventions were identified by AUSTRAC of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (The Act).
Background to AUSTRAC
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia's financial intelligence agency with regulatory responsibility for anti-money laundering and counter-terrorism financing. They identify threats and criminal abuse of the financial system, and act to protect Australia's economy. They also work in partnership with industry and government agencies in Australia and overseas to
- help keep Australia safe from financial and other serious crime; and
- build and maintain trust in Australia's financial system as part of the global community.
The Financial Intelligence Unit in AUSTRAC is used to combat crimes such as:
- terrorist financing;
- serious & organised crime;
- money laundering; and
- tax evasion.
In fact, in a Media Releases from 3 March 2017, it was announced that AUSTRAC has also launched a world-first alliance, including both public and private sector, to combat serious financial crime. The new Alliance has been called the Fintel Alliance and comprises 19 partners including Australia's financial intelligence agency AUSTRAC, the Australian Federal Police, New South Wales Police, the Australian Tax Office, the four big banks, Western Union and PayPal. According to the Media Release, this is the first true public-private partnership of its kind in the world, and brings together under the one roof the collective knowledge and resources of Government and industry.
Three projects already underway include:
- Examining the Panama Papers;
- Identifying and profiling online money mules; and
- Enhancing the use of Australian Cyber Online Reporting Network data.
The Alliance has also established an Innovation Hub to provide a collaborative approach to design and test financial products, and explore ways to target emerging technologies like blockchain. The Alliance will also be underpinned by a ground-breaking Financial Intelligence Analyst Course, to train the next generation of analysts across law enforcement, intelligence agencies and businesses.
Federal Court Tabcorp Decision
According to the AUSTRAC Media Release, Justice Perram has found that Tabcorp failed to:
- Have a compliant AML/CTF program for over 3 years to manage the risks of money laundering and terrorism financing.
- Give AUSTRAC reports about suspicious matters on time or at all on 105 occasions. Tabcorp has admitted that these suspicions related to unlawful activity including money laundering and credit card fraud.
- Identify a customer who collected $100,000 in winnings.
- Enrol with AUSTRAC on time.
AUSTRAC CEO Paul Jevtovic said:
“Failing to uphold a robust AML/CTF program creates opportunities for serious and organised crime and terrorist groups to conceal the movement and use of illicit funds for attacks and crimes against Australian citizens...In our view, Tabcorp had a corporate culture indifferent to meaningful AML/CTF compliance and risk mitigation until we intervened.”
The $45 million civil penalty awarded against Tabcorp is believed to be the highest in Australian corporate history and the financial consequences of the proceedings for Tabcorp will amount to more than $90 million once AUSTRAC’s agreed court costs and Tabcorp’s disclosed defence costs are factored in.
Mr Jevtovic said that the approach taken by Tabcorp to invest in its AML/CTF program as a result of AUSTRAC’s enforcement action was also a positive outcome. Tabcorp chief executive David Attenborough confirmed the $45 million settlement and said the company had cooperated with AUSTRAC:
"We remain firmly committed to continuing to work cooperatively with AUSTRAC into the future...We have made a significant investment in enhancing our compliance over the last three years and remain focussed on being the industry leader in regulatory compliance across all of our operations."
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