Anti-money laundering body Austrac to begin legal proceedings against Tabcorp

Australia’s financial intelligence unit, AUSTRAC, is taking wagering and keno operator Tabcorp to court, claiming that Tabcorp has failed to comply with anti-money laundering and counter-terrorism financing laws.

The statement of claim, filed in the Federal Court in Sydney on Tuesday, also accuses the Melbourne-based company of failing to conduct adequate due diligence on its customers, employees and transactions.

“Non-compliance of this nature provides opportunities for organised crime to exploit vulnerabilities and puts at risk the integrity of the Australian financial system”, said Austrac in a statement.

AUSTRAC has stated to Australian media that it has gained a comprehensive document of Tabcorp’s anti laundering failures, the body has detailed that it has over 100 separate breaches of laws by Tabcorp.

Tabcorp has issued a brief statement saying it takes compliance obligations extremely seriously and will consider its response. Law enforcement agencies have long pressured gambling companies to verify the origins of the funds they process to ensure they can not be used to “clean” money obtained unlawfully.

If AUSTRAC’s legal proceedings are successful, Tabcorp could face a maximum civil penalty of up to $17m.

Established in 1989, the government agency makes sure Australian businesses remain compliant with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and aims to prevent organised crime impacting on the financial sector. For the 2013-14 financial year, Tabcorp posted a net profit of A$130 million.

Tabcorp shares were down 2.4% to $4.86 at around 12:35pm AEST against a roughly 1% fall in the broader market. The matter is scheduled for a preliminary hearing on August. 11.