James Packer Crown Casino Melbourne

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Packer is the founder of Crown Resort and remains the Australian casino company’s largest shareholder. He has tried to stay out of the public eye over the past several years. The inquiry revolves. Crown Resorts’ Melbourne casino is planning to reopen its doors on Thursday, November 12 after months of closure. Vegas Slots Online reports that following the all-clear from health officials, the company will reopen its flagship casino while following strict public health advice.

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Leading law firm Maurice Blackburn Lawyers has lodged a new class action against Crown Resorts Limited alleging the company’s governance and risk management failings caused a massive share price plunge in October.

Crown’s share price fell over 8 per cent on October 19 after news emerged that anti-money laundering agency AUSTRAC had initiated a formal enforcement investigation into Crown, having identified potential non-compliance by Crown Melbourne with anti-money laundering (AML) financing laws.
Maurice Blackburn Lawyers on Friday lodged the new class action with the Supreme Court of Victoria alleging Crown had engaged in misleading or deceptive conduct during the period from 11 December 2014 to 19 October 2020 by representing that it had robust or effective systems for ensuring compliance with its AML obligations, including as they applied to its VIP international business and engagement with overseas junket tour operators, and had not disclosed relevant information to the market.
The claim also alleges that Crown conducted its affairs during that period in a manner that was contrary to the interests of shareholders and is seeking an order from the court that the company buy back shares from affected investors.
At Crown’s AGM on 22 October, following weeks of damaging evidence at the NSW Casino Inquiry, chairwoman Helen Coonan “unreservedly apologised” for Crown’s “governance and risk management failings”. On 19 November Crown conceded to the NSW Casino Inquiry that it was “more probable than not” that criminals had laundered money through two of its bank accounts. Those concessions followed on evidence given by Crown directors and personnel at the NSW Casino Inquiry including that:
 Crown did not provide AML training to Board members or senior executives at least until August or September 2020, and its AML compliance officer for Crown Melbourne until March 2017 did not know she had that role;
 Crown did not formally document its procedures for or assessments of junket tour operators with respect to the risk that they posed in terms of associations with money laundering or organised crime; and it continued to deal with such persons even after significant red flags were raised by law enforcement agencies;
 Crown’s systems enabled financial transactions to be made by junket tour operators or participants that sat outside CWN’s reporting AML framework, including via its Riverbank and Southbank bank accounts, and by allowing the junket Suncity to manage its own cash desk inside Crown Melbourne from 2014 (at which $5.6m was found in cash on an occasion in April 2018);
 Crown’s confidential financial forecasts for FY2021 and FY2022 were provided to former director James Packer, and in May 2019 were used in negotiations by Mr Packer’s Consolidated Press Holdings to sell 20% of Crown shares to Melco Resorts and Entertainment. Melco was Crown’s former joint venture partner in casinos in Macau and the Philippines and was a company associated with controversial Dr Stanley Ho, banned from taking any beneficial interest in Crown under the terms of Crown’s Sydney casino licence.
The new class action follows a separate, on-going class action against Crown launched by Maurice Blackburn in 2017 on behalf of shareholders who purchased Crown shares in the period 6 February 2015 to 16 October 2016. That class action followed on a fall in the company’s share price on 16 October 2016 after revelations that 19 Crown employees had been detained in China on suspicion of engaging in illegal marketing of its gambling services.
Lead plaintiff Greg Lieberman, a father of four from Sydney, said he invested in Crown believing it was a responsible company with strong governance.
“It’s been very disappointing to learn how badly Crown has behaved. The company held itself out as a good corporate citizen and has let a lot of us down. I didn’t expect to be investing in a cowboy outfit,” Mr Lieberman said.
Maurice Blackburn Principal class actions lawyer Miranda Nagy said shareholders would expect Crown to have best-practice governance and to have complied with laws designed to combat money laundering.
“We believe these governance failures have caused real loss to shareholders who would have expected best-practice compliance with anti-money laundering obligations, especially given Crown’s repeated public statements that it took compliance with such laws seriously. Instead it appears Crown’s systems left the company potentially exposed to criminal activity happening on its premises and through its bank accounts.”
“An object of the anti-money laundering laws is to promote public confidence in the Australian financial system by the detection and disruption of money laundering. Investors are entitled to rely on gaming companies to implement systems that will ensure rigorous compliance with all such laws, because casinos are unmistakable targets for criminal activity.”
Ms Nagy said further, “We believe there is a basis to say Crown did not merely mislead and fail to disclose information to the market, it really conducted its affairs in a manner that was deleterious to shareholders’ interests as a whole. We are asking the Court not just to award compensation where appropriate, but also to consider requiring Crown to buy back investors’ shares at a fair value and to implement a proper anti-money laundering training program delivered by an accredited professional, so this conduct never recurs.”
Shareholders that purchased Crown shares in the period from 11 December 2014 to 18 October 2020, or who owned shares as at 10 December 2014 and held them until at least 18 October 2020, can participate in the class action.

The first signs of irregularity at Crown Resorts dates back all the way to September 2014. Investigative journalists blew the lid off the business structures in place at Crown Resorts, and alluded to a longstanding system whereby Crown was able to draw in wealthy customers from the mainland through its partnerships with junket operators such as Suncity. The junket operators had long been identified by law enforcement as front-businesses for organized crime groups with records of violent debt collection and association with Triads and other known Asian mafia groups.

The Sydney-based casino is in hot water, as has been well-documented, they are facing investigations from several different angles as accusations of money-laundering and complex criminal networks are thrown at the organization. ©Hans/Pixabay

The revelations began by making the claim that these junket operators were not just limited to making money from facilitating the gambling operations within Melco’s VIP rooms of Macau, but also acting as a vehicle for rich Chinese gamblers to transport their money to the Crown Resorts casinos owned by James Packer in the glass buildings of Melbourne and Sydney. Surprisingly, when these revelations hit the press in 2014 the reaction was extremely muted and didn’t cause much of a stir amongst the people.

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The political reaction was also relatively non-existent. Very few people in Australia cared at the time that one of the biggest casinos in the continent was indirectly financing organized crime groups. More importantly, though was the lack of a response from the key regulator with legal oversight in these cases the Victorian Commission for Gambling and Liquor Regulation (VCGLR). The failure to root out criminality has culminated in James Packer pleading his innocence, and the Barangaroo operating license being withheld.

Criticisms are swirling around the ineptitude of the regulator to stifle this activity at the root. The history of inaction dates back to 2014, and now many independent investigators are not only looking into the misdeeds of Crown Resorts but also of the Victoria casino regulator and the systematic failings that enabled the current situation to unfold.

Victoria Regulator Fell Asleep at the Wheel

Plenty of higher-ups in the Australian government have been delivering their verdict on the fiasco, with one minister saying the best he could say is that the Victorian regulator had “fallen asleep at the wheel” in reference to the Crown Resorts debacle. The point being made by the government, in this case, is that the regulator has a responsibility to mitigate the threat of corruption and mismanagement of the casino’s corporate and day-to-day operations.

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Legal academics across Australia have begun taking note of this case also. They claim that the regulator has been abysmally poor in regulating the industry for a long while, and this latest infraction by Crown is just the tip of the iceberg in a cataclysm of cases surrounding the casino. So far, the Victorian Commission for Gambling and Liquor Control has been particularly resistant to criticisms.

In their defense, the VCGLC has stated that they conducted a series of investigations up until 2018 whereby the operations of Crown Resorts were thoroughly reviewed. They maintain that they liaised with local law enforcement and the national anti-money laundering agency, all of which indicated that Crown was generally compliant with the laws. Essentially the regulator is trying to pass off the blame and claims that it did its part in the investigation.

James Packer Crown Casino Melbourne

The facts remain that many officials failed to stop potentially billions of dollars flowing through the doors of Crown Resorts that were illicit in nature. Publicly, there are many concerns that have been raised. Behind closed doors, the investigators will be pouring over the financial statements of the casino in order to try and figure out how so many red flags were missed over the five-year period.

Victorian Premier Defends Crown Melbourne License

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In a twist to this story, the Victorian Premier Daniel Andrews has come out to publicly defend the prospect of Crown Resorts continuing with its operating license. Even after evidence has emerged which unequivocally proved money laundering had taken place at the Perth and Melbourne properties of Crown Resorts, Mr. Andrews says that the casino will not be subject to a license removal.

What has been agreed is that disciplinary action will be imposed. This less serious penalty for the casino will see it fined a large sum of cash and have external people placed within the organization to help steer it back onto the right course. All of this will be music to the ears of James Packer and the Crown Resorts hierarchy as retaining the operating license is their main objective throughout these hearings.

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But keeping business running as normal will certainly come at a human cost for the Crown Resorts management. External people are due to be put in key positions of oversight in part of an agreement deal struck with the authorities to enable Crown to continue regular operations. The investigations continue in Australia as the casino world watches on with interest. More to follow on this story so check back with us again soon.