Tabcorp hit with record $45 million fine

GAMING company Tabcorp has been fined $45 million for breaching anti-money laundering and anti-terrorism financing laws.

The massive fine imposed by the Federal Court is the highest civil penalty in Australian corporate history.

The multi million dollar fine was handed down after a civil penalty proceedings was brought against Tabcorp by AUSTRAC, the Federal Government's financial intelligence and regulatory agency.

The Federal Court found that Tabcorp broke the law on 108 occasions over five years.

In July 2015, AUSTRAC filed papers in the Federal Court against the three Tabcorp group companies for extensive, significant and systemic noncompliance with Australia's anti-money laundering and counter-terrorism financing legislation.

AUSTRAC CEO Paul Jevtovic addressed the media in Sydney today, where he said that it sends an "unequivocal message" to gaming companies.

"It wasn't until AUSTRAC drew these deficiencies to the attention that they have been found out, he said.

"There can be no doubt that this was a serious failure in the corporate governance and the size of the penalty reflects a consistent and extensive noncompliance.

"Quite simply it failed in its obligations."

"The noncompliance arises from a corporate culture that is indifferent to money laundering and terrorism financing requirements," he added.

He said cultures such as this put the community at risk with crimes committed by organised crime groups and "serious criminals" and others who could divert their "criminal wealth" to the "black market" and fund other illegal activities such as drug trafficking.

"It failed to give AUSTRAC reports about suspicious matters on time or at all.

"Tabcorp has admitted these suspicions related to unlawful activity including money laundering and credit card fraud.

"Tabcorp has admitted that it had insufficient processes for consistent management oversight, assurance and operational execution of the money laundering program."

He said it's money laundering, terrorism and financing function was at times "underresourced" and senior managers did not get regular reports from it.

Mr Jevtovic said that the response from Tabcorp had been positive with better governance measures with more time, investment and resources offered.

"This outcome sends a clear message to boards and senior management across all industries," he said.

News Corp Australia

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