AUSTRAC takes Tabcorp to court

Australia’s financial intelligence unit, Austrac, is taking wagering and keno operator Tabcorp to court, claiming it 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”, AUSTRAC’s Jevtovic said in a statement.

Acknowledging the proceedings, Tabcorp said it would review the nature of the proceedings and inform the market of its intended response.

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 is under fire over anti-money laundering and counter-terrorism financing laws and AUSTRAC is ready for a showdown.

If AUSTRAC’s legal proceedings are successful, Tabcorp could face a maximum civil penalty of up to $17m. Tabcorp told the League, which told the police, but not AUSTRAC, the agency said.

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 fell 3.6 per cent, while the broader market fell 1 per cent, as investors mulled the possibility of a costly lawsuit. The matter is scheduled for a preliminary hearing on August 11.