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Australia’s casinos a hotspot for global money-laundering operations

Posted By on February 24, 2021 @ 06:00

The Bangkok office of the United Nations Office on Drugs and Crime warned [1] in recent reports that Australia is part of organised crime networks involved in trafficking in wildlife and timber, people-smuggling and money-laundering. Counterfeit medicines are also a global issue. Much of the laundered money in Australia is being used in casinos.

Indeed, the power of casinos in a country is a good indicator of the extent of money-laundering and serious crime networks according to the Environmental Investigation Agency, a non-government organisation in the UK.

The recent allegations against Crown Resorts related to money-laundering and people-smuggling are one indicator of Australia’s involvement in this growing network in Southeast Asia. The Australian government has a good record in taking crimes seriously when they directly affect public health, but it seems reluctant to confront organised crimes conducted through casinos.

Last March, Australia called on the G20 nations to end wet markets selling wildlife due to the threat to human health. But organised crime allegations brought against Crown in Melbourne and Perth appear to have received less attention from authorities, and some experts question the regulators’ ability to deal with the scale of the problem at casinos. Earlier this month, the Independent Liquor and Gaming Authority found that [2] Crown was not fit to operate its new casino at Barangaroo in Sydney due to ‘poor corporate governance’ and ‘deficient risk-management structures’ after a year-long public inquiry.

Organisations like the Environmental Investigation Agency have been investigating the role casinos play in crime in general and, specifically, in money-laundering and the wildlife trade [3]. According to Julian Newman, campaign director at EIA, ‘Money laundering is definitely linked to the illegal wildlife trade, but there are few cases of successful prosecution of wildlife traffickers for financial crimes.’ According to the EIA, the Illegal wildlife trade is the fourth largest type of crime in the world after arms, drugs and human trafficking, and it generates US$7–23 billion in profits every year.

One significant trafficking case involved the Kings Roman Group casino [4] in northern Laos. In 2018, the US government placed sanctions on Zhao Wei, the head of the Kings Roman Group. Wei and others were running a transnational organised crime group involved in narcotics, wildlife trafficking and human trafficking. The EIA says it believes wildlife trading still happens at the site.

Other casino businesses linked to wildlife trafficking can be found in Mong La on the Myanmar–China border. Border towns like these are particularly attractive to traffickers due to their ‘territorial ambiguity’, which can lead to lawlessness and corruption, according to Newman.

Macau is known to be a hub for money-laundering globally. For instance, much of the laundered money [5] allegedly used at Crown’s casinos in Australia came from mainland China, via Macau. With the strict laws on the amount of money mainland Chinese people can take out of the country, Macau is often the stop-off point to Australia where Chinese people can sell goods like watches for cash. They can then use that money to bet in casinos in Australia. New technologies such as mobile applications and cryptocurrencies have also made it easier for money to be laundered.

According to Newman, Wei was involved in the casino business in Macau before opening the casino in Laos. He also ran one in Mong La. These casinos are global businesses and it’s clear Australia hasn’t viewed such crimes as serious enough to warrant better regulation or stronger enforcement action.

Corporate governance expert Thomas Clarke from the University of Technology Sydney believes Australian politicians are inclined to see casinos and banks ‘as great money-making institutions to be supported in the interests of the local and national economy’. He says they often don’t want to know about criminal activities as a result, a concerning sign for Australia’s security.

Newman says one way to combat money-laundering and related crimes is for global financial institutions, including multinational banks, to make greater efforts to identify and submit suspicious transaction reports to the relevant authorities. This would make it harder for wildlife criminals to move money through the formal banking system.

Clarke isn’t ready to give up on the regulator, AUSTRAC, which was set up to monitor financial transactions in a wide range of crimes, including money-laundering. The agency plays key role in finding the main organisations behind the criminal networks using casinos.

‘AUSTRAC has proved the most determined of the Australian regulators in the actions against Commonwealth Bank and Westpac and the large fines they imposed’, Clarke says. AUSTRAC has reported on the scale of recent criminal activities being conducted through banks and businesses like casinos, finding that these organisations were financial arteries for the crimes.

Even if Clarke’s belief in AUSTRAC is well founded, it’s clear Australia has a huge challenge ahead to deal with the scale of crimes being conducted through casinos. An inquiry finding a company not fit to run a casino due to governance issues seems an understated response at best when there’s evidence of links to serious organised crime. It’s significantly worrying for Australia’s security.

As Newman says: ‘The bosses in these crimes aren’t untouchable and the tools to go after them are increasingly available. We need to follow their money to put them behind bars.’



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URLs in this post:

[1] warned: https://www.unodc.org/southeastasiaandpacific/en/what-we-do/toc/wildlife-forest-crime.html

[2] found that: https://www.abc.net.au/news/2021-02-09/crown-found-not-suitable-to-hold-sydney-barangaroo-licence/13134756

[3] money-laundering and the wildlife trade: https://eia-international.org/news/following-the-blood-money-the-importance-of-targeting-the-huge-profits-of-illegal-wildlife-trade/

[4] Kings Roman Group casino: https://eia-international.org/report/sin-city-illegal-wildlife-trade-in-laos-special-economic-zone/

[5] laundered money: https://www.theage.com.au/business/companies/crown-has-failed-on-money-laundering-20200910-p55uhj.html

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