Crown’s Claim of Financial Hardship Questioned by Federal Court

In a recent development, Federal Court Justice Michael Lee has raised doubts about Crown’s assertion that it cannot afford to pay the AUD450 million ($301 million) fine imposed by AUSTRAC in a single payment. The fine was levied against the casino giant for numerous breaches of anti-money laundering and counter-terrorism laws.

Justice Lee Questions Crown’s Financial Predicament in Landmark Court Proceedings

During the court proceedings, Justice Lee emphasized that the penalty was already at the lower end of what would be considered an appropriate punishment for the company’s “absolutely egregious” misconduct, reported the Australian Financial Review. Crown’s suggestion to pay the fine over a two-year period would reduce its net present value to AUD406 million ($271.6 million) when accounting for interest rates.

Crown’s barrister, Philip Crutchfield, KC, claimed that the company “can’t afford to pay more than we’ve agreed.” However, Justice Lee expressed skepticism about the veracity of Crown’s financial predicament, noting the lack of substantial evidence beyond an affidavit from the company’s CFO, Alan McGregor. Justice Lee further highlighted the absence of cross-examination of McGregor by AUSTRAC, which hindered the verification of Crown’s claims.

Justice Lee emphasized the need for accountability and suggested that the lack of thorough examination of witnesses’ affidavits could undermine the honesty of their statements. He also raised concerns about the penalty’s failure to factor in the historical payment of dividends to Crown shareholders, suggesting that the penalties should be significant enough to discourage similar illegal activities.

In February, Justice Lee also criticized AUSTRAC for taking too long to bring the case against Crown to the court.

Crown’s Contrition Questioned as Justice Lee Weighs Options for Fine Approval

Justice Lee is expected to deliver his final decision on the afternoon of July 11. While he indicated his inclination to approve the fine, he also contemplated the possibility of appointing an independent party to assess Crown’s financial situation. Alternatively, he proposed allowing a payment plan but with provisions for Crown to pay earlier if its financial position improved.

Crown’s contrition was also called into question during the court proceedings. Although the company expressed remorse for its breaches and underwent a complete overhaul of its board and senior management, Justice Lee challenged whether the changes truly reflected a genuine state of contrition. He emphasized that contrition should entail a genuine change of mindset and not merely the replacement of individuals involved in the wrongdoing.

The outcome of this case will have significant implications for Crown and the gambling industry as a whole. At the same time, Australia is poised to implement significant changes to its gambling industry, with proposals for a national gambling regulator and a ban on all forms of gambling advertising.