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UPDATE 1-Australia files laundering suit against betting giant Tabcorp

Published 22/07/2015, 07:28 pm
© Reuters.  UPDATE 1-Australia files laundering suit against betting giant Tabcorp
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* Agency says Tabcorp has failed to notify it of suspicious bets

* Says Tabcorp has inadequate customer and staff monitoring

* Tabcorp says takes obligations seriously (Adds statement of claim)

By Byron Kaye

SYDNEY, July 22 (Reuters) - Australia's anti-money laundering agency has filed a civil court action against Tabcorp Holdings Ltd TAH.AX , accusing the gambling giant of failing to take sufficient precautions against money laundering and terrorism financing.

A statement of claim by the Australian Transaction Reports and Analysis Centre, known as AUSTRAC, obtained by Reuters, accused the world's No.7 listed gambling firm of failing to notify it about dozens of bets suspected to be illegal, and failing to tell it about 31 customer accounts set up using fake credit cards.

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.

The A$4 billion ($2.97 billion) firm's staff monitoring system "does not contain any risk-based systems and controls for (Tabcorp) to determine whether to ... re-screen an employee where the employee is transferred or promoted and may be in a position to facilitate the commission of a money laundering or financing offence," the statement said.

Tabcorp said in a statement that it took its compliance obligations "extremely seriously", and that it would review AUSTRAC's lawsuit before responding further.

Law enforcement agencies have long pressured gambling companies to verify the origins of the funds they process to ensure they cannot be used to "clean" money obtained unlawfully.

Australian laws require gambling and financial services companies to monitor customer accounts proactively so they are not used to house the proceeds of organised crime or support terrorism.

AUSTRAC Chief Executive Officer Paul Jevtovic said Tabcorp failed to improve its compliance after a "long and comprehensive" assessment by the watchdog.

AUSTRAC's claim detailed nearly 60 instances where Tabcorp staff placed bets on credit - an illegal practice in Australia - before the company suspended those staff and called the police. Tabcorp breached its obligations by failing to notify AUSTRAC, it said.

In 2010, Tabcorp suspended bets for a National Rugby League match after it received an unusually large amount of bets on the possibility that one of the teams would score first with a penalty goal. Tabcorp told the League, which told the police, but not AUSTRAC, the agency said.

AUSTRAC said the maximum penalty for Tabcorp would be A$17 million. For the 2013-14 financial year, Tabcorp posted a net profit of A$130 million.

Tabcorp shares fell 4 percent, while the broader market dropped 1 percent, as investors mulled the possibility of a costly lawsuit. The matter is scheduled for a preliminary hearing on Aug. 11. ($1 = 1.3488 Australian dollars)

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