The highest ever civil penalty in corporate Australian history was today ordered against Tabcorp by the Federal Court of Australia.

AUSTRAC CEO Paul Jevtovic said that the record $45 million civil penalty serves as a stark reminder to all reporting entities that there are serious consequences for non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

“Today the court found that Tabcorp had contravened the AML/CTF Act on 108 occasions over a period of more than five years,” said Mr Jevtovic.

Justice Perram has found that Tabcorp failed to:

1. Have a compliant AML/CTF program for over 3 years to manage the risks of money laundering and terrorism financing.
2. Give AUSTRAC reports about suspicious matters on time or at all on 105 occasions. Tabcorp has admitted that these suspicions related to unlawful activity including money laundering and credit card fraud.
3. Identify a customer who collected $100,000 in winnings.
4. Enrol with AUSTRAC on time.

“Failing to uphold a robust AML/CTF program creates opportunities for serious and organised crime and terrorist groups to conceal the movement and use of illicit funds for attacks and crimes against Australian citizens,” said Mr Jevtovic. 

“In our view, Tabcorp had a corporate culture indifferent to meaningful AML/CTF compliance and risk mitigation until we intervened.”

Tabcorp admitted that it had insufficient processes for consistent management oversight, assurance and operational execution of its AML/CTF program. Its AML/CTF function was under-resourced, and Tabcorp’s senior management did not regularly receive reports in relation to AML/CTF compliance.

Mr Jevtovic said, “Boards and senior management across all industries should take note to ensure that they are fully informed of their AML/CTF compliance.”

“Such contraventions are not to be taken lightly and this unprecedented civil penalty highlights AUSTRAC’s resolve to take enforcement action against reporting entities that engage in significant, extensive and systemic non-compliance.”

The financial consequences of the proceedings for Tabcorp will amount to more than $90 million once AUSTRAC’s agreed court costs and Tabcorp’s disclosed defence costs are factored in.

Mr Jevtovic thanked the significant contribution provided by Victoria Police, New South Wales Police, the Australian Federal Police and leading global AML experts in delivering this important outcome.

“Our achievements are only possible due to the extensive networks that we have built both within Australia and overseas,” Mr Jevtovic said.

“Importantly, these networks not only include government and law enforcement partners, but also industry and the private sector.”

AUSTRAC has a complementary role as both a regulator and an educator to ensure reporting entities strengthen their AML/CTF practices.

Mr Jevtovic said that the approach taken by Tabcorp to invest in its AML/CTF program as a result of AUSTRAC’s enforcement action is a positive outcome.

“We are very encouraged by the actions taken by Tabcorp in response to this investigation,” Mr Jevtovic said.

“It is critical that industry recognise that they are often the first and last line of defence.”

“That is why AUSTRAC is committed to working collaboratively with industry, and in this instance Tabcorp, to protect Australia’s financial system and to foster the growth of the economy.”