On October 19, 2022, as much of Australia awaited a jury’s verdict in the blockbuster Bruce Lehrmann rape trial, a staff member at a Sydney mega club had other matters on his mind.
Internal emails show the “gaming co-ordinator” for the Mounties empire spent the day hunting down CCTV footage after a woman was earlier spotted behaving suspiciously in the Dragon Lounge between 12.36am and 1.22am. The high roller, dubbed “Customer 12″ in newly released court documents, was seen handing two other players bundles of $100 notes, before all three shoved the cash into poker machines without placing any actual bets.
The woman, who claimed her occupation was “home duties”, exhibited other strange behaviours as she pushed $5.75 million through the machines over just 344 days. She was seen inserting other banknotes with little to no play activity, handing wads of cash to other players who then also embarked on the same form of suspicious play, and collecting tickets from other patrons to then redeem for a cheque.
This was classic money laundering behaviour, and much of it raised red flags within the club via dozens of so-called “suspicious matters” reports, “know your customer” forms, “enhanced customer due diligence” screening, and “source of funds” investigations – the latter of which repeatedly concluded the woman did not have the means to justify the amount she was betting.
The customer had by now been deemed high risk, and evidence of systemic money laundering was stacking up. But nothing was done until the financial crimes watchdog AUSTRAC came knocking. Mounties panicked and terminated the woman’s membership in October 2024 – two years after her Dragon Lounge exploits had prompted the gaming co-ordinator’s request for CCTV footage.
“Customer 12” is one of 13 high rollers examined in a court document bursting with examples of failure, ignorance and greed. AUSTRAC is suing Mounties in the Federal Court for failing to prevent money laundering, which can be used to prop up criminal networks and even terrorism. The 13 players each laundered huge sums of dirty cash through Mounties, totalling up to $226 million in just five years.
In annual reports and advertisements, Mounties told its members and regulators that the gaming behemoth was an expert at handling the risk of money laundering. However, an analysis by the Herald shows an extraordinary 691 red flags and warnings that could have stopped the 13 players in their tracks, but all were ignored, missed or swept under the carpet.
Mounties, which has as many members as Wollongong does residents, even allowed suspect players to thrive at its venues long after the NSW Crime Commission released a landmark report in 2022 that found money laundering in clubs and pubs was rife.
Of the 65 various red flags and warning signs in the case of Customer 12, nearly 50 were present after the crime commission’s damning report put clubs on notice.
An agreed statement of facts filed with the Federal Court last month shows Mounties repeatedly ignored obvious signs of money laundering, particularly at Mount Pritchard, the “mother club” of the group’s empire, which spreads from south-west Sydney to the northern beaches and beyond to the Central Coast.
Red flags, warnings and missed opportunities for Mounties to stop the suspected laundering as outlined include:
- staff observations of, or emails about, suspicious player behaviour
- the completion of various due diligence reports and screening, or the failure to do them
- source of funds checks being done, or not done
- occupations or places of residence that did not square with a player’s high gaming activity
- the number of months when a customer received more than $50,000 in cheque payouts
- being listed as “high risk” in internal monitoring systems, or wrongly being deemed a “low risk”.
Mounties revealed in its 2023 annual report that it had been investigated 32 times that year by state and federal authorities including Liquor and Gaming NSW, the ATO, AUSTRAC and NSW Police. It claimed all the probes had found no evidence of wrongdoing.
But even Mounties’ own staff had sometimes concluded criminality was at work.
One player who may have laundered up to $26.7 million through the club was the subject of a Mounties investigation. In response to the question, “Is there any evidence to suggest the customer was involved in any criminality?” , the answer was recorded as “yes”.
That was April 2023. The club did not kick the player out until August the following year.
After monthly transaction monitoring, Mounties suspected another of the 13 customers highlighted by AUSTRAC was also money laundering. The issue even came up in a quarterly meeting attended by the club’s anti-money laundering compliance officer, its gaming operations co-ordinator, and BetSafe consultant Daniel Symond in October 2019 and again in October 2020.
The player’s membership wasn’t cancelled until October 2024.
AUSTRAC has since discovered that under Mounties’ policy, termination of a player’s membership would occur only if the customer was the subject of many internal investigations; the club had established “blatant and severe” money laundering activity; and a finding that the person posed an “unsatisfactory” risk to the club’s legal obligations.
The high bar for termination meant most suspects were not kicked out until Mounties’ management and board had their hand forced by AUSTRAC’s queries.
Mounties now concedes its risk assessment framework, staff training, transaction monitoring program and critical customer due diligence screening process were deficient. The Federal Court case is being closely watched by other Sydney clubs where money laundering is also likely to have occurred.
In a statement, Mounties said it had fallen short and that it was working to lift its game. “Mounties takes its regulatory obligations seriously and acknowledges that the community rightly expects better, and that we should have done better,” a spokesman said.
The gaming and hospitality group took out a full-page advertisement in the Herald’s Thursday print edition spruiking its motto of “profit for purpose”. The ad was booked after the Herald asked questions about the AUSTRAC investigation earlier in the week.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
From our partners
Read the full article here
