Court approves Tabcorp's A$45 million AML settlement with Austrac

The end is in sight for Tabcorp’s anti-money laundering clash with the Australian Transaction Reports and Analysis Centre which has seen the gambling group agree a A$45 million settlement with the regulator – believed to be the highest penalty yet levied in Australian corporate history.

On Thursday the company announced that the settlement has been approved by the Federal Court and can now go ahead. The court additionally confirmed that Tabcorp is to pay AUSTRAC’s likely substantial legal costs on an agreed basis.

Tabcorp managing director and CEO, David Attenborough said in a statement Thursday:

“Tabcorp is pleased to have concluded the proceedings. We remain firmly committed to continuing to work co-operatively with AUSTRAC into the future. We have made a significant investment in enhancing our AML/CTF compliance over the last three years and remain focussed on being the industry leader in regulatory compliance across all of our operations. This is in line with our vision to be the world’s most respected gambling-led entertainment company.”

The statement advises that Tabcorp will recognise an expense in respect of the penalty amount in its financial statements for the year ending 30 June 2017. This expense will be treated as a significant item.

The Federal Court found that Tabcorp failed to alert regulators on 108 occasions on suspicious AML behaviour over a period of five years. Justice Perram found that in one case, Tabcorp failed to alert authorities to a customer who collected $100,000 in winnings.

AUSTRAC chief executive Paul Jevtovic said Tabcorp had not done enough to ensure it was not being used by organised crime groups or terrorists to fund illegal activities.

“Its money laundering and terrorism financing function was at times under-resourced and Tabcorp senior management didn’t regularly receive reports in relation to the money laundering and terrorism finance compliance,” he said.

“This was a serious failure in the corporate governance and the size of the penalty reflects a significant and extensive noncompliance.

“In my view, the noncompliance arises from a corporate culture that is indifferent to money laundering and terrorism financing requirements.”