money laundering and gambling

Author: Nyman Gibson Miralis

Subject: Money Laundering and Gambling

Keywords: money laundering, gambling/gaming, Anti-Money Laundering and Counter-terrorism Financing Act, AUSTRAC

 

The high volume of cash flowing through casinos can be very attractive to those looking to launder their ‘dirty’ money. However, a recent number of highly publicised cases have led to a law enforcement focus on the gaming industry as authorities step up in their efforts to target money laundering at the State and Commonwealth level.

 

Money Laundering and Gaming (Gambling) Legislation

Money laundering – the process by which money that is derived from illegitimate means are given the appearance of coming from a legitimate source – is estimated to involve between $10-15 billion per year in Australia. Because there is so much cash moving quickly through casinos and other gaming organisations, they are an obvious target for money launderers.

In the past, the advantage that casinos and other gaming service providers offered for money launderers was that casinos previously were not required to disclose details about the origin of money being deposited. Historically, people could walk into casinos with large amounts of cash which they could trade for chips without facing the questions they would invariably face if they were trying to deposit the same amount of cash with a bank. However, recent changes to Australia’s anti-money laundering legislation have attempted to target and deter this behaviour. The Anti-Money Laundering and Counter-terrorism Financing Act 2006 (“AML/CTF Act”) defines gambling service providers  (including casinos) as a ‘reporting entity’. Reporting entities have a number of obligations under the AML/CTF Act, including:

  • Requiring the identification and verification of customers;
  • Conducting ongoing customer due diligence;
  • Complying with record-keeping obligations; and,
  • Reporting suspicions matters and transactions (including transactions greater than $10,000).

 

Money Laundering Case Study: Yan Wei Koh

In a recent case, Singaporean national, Yan Wei Koh, was sentenced to 12 months imprisonment by Judge Henson in the Downing Centre Local Court after pleading guilty to 2 counts of dealing with property suspected of being the proceeds of crime. Mr Koh was arrested in May 2015 by police after depositing $299,650 and $703,000 in cash a day apart in a safety deposit box at The Star Casino. Mr Koh came to the attention of police after police received information from Casino staff and from the Australian Transaction Reports and Analysis Centre (AUSTRAC) regarding Mr Koh’s suspicious transactions.

Mr Koh initially gave police a convoluted story where he asserted that the money was proceeds of a brothel business belonging to his aunt living in Newcastle. Mr Koh claimed that his aunt had asked him to collect the money on behalf of her ex-husband, who was living in China. Enquiries by police later established that Mr Koh’s story was false and could not be corroborated.

Mr Koh received a 40% discount on his sentence for his guilty plea and for his assistance with police to secure the arrest of two other people.

 

Money Laundering Case Study: Yi-Hua Jiao

In another publicised case, the Court of Criminal Appeal allowed a Crown appeal on the inadequacy of Ms Yi-Hua Jiao sentence, quashing her original sentence and imposing a term of imprisonment of 16 months. Ms Jiao was found guilty by a jury to an offence under s 400.9(1) Criminal Code 1995 (Cth) of dealing in proceeds of crime (amount greater than $50,000) with the belief that it is proceeds of crime.

In January 2013, Ms Jiao met a man, later identified as Mr Thi Nguyen, at The Star casino in Sydney. Ms Jiao identified herself to Mr Nguyen by exchanging with him a $5 note with a known serial number – this method of identification is common practice in criminal and money laundering syndicates.

Ms Jiao accompanied Mr Nguyen to the casino car park and collected a sports bag from him. Ms Jiao went to the Sovereign Room at The Star and deposited the contents of the bag, $624,340 in cash into her casino account. Ms Jiao later withdrew $300,000 in cash and took it to the Pyrmont branch of the Commonwealth Bank.

Meanwhile, casino staff had notified the Australian Federal Police of Ms Jiao’s suspicion transaction, and she was later arrested at the bank. Ms Jiao asserted that the cash belonged to a Mr Liu, whom she did not know and did not know how to contact; that she was depositing the cash into her Commonwealth Bank account before the funds would eventually be remitted in China.

Ms Jiao’s sentence took into account her cooperation with the police as well as her age (55 at the time of the offence), the fact that she was a foreign national for whom a custodial sentence would be difficult, and the fact that she had no previous convictions.

 

Nyman Gibson Miralis are experts in transnational money laundering investigations, assisting companies and individuals who are the subject of investigations by AUSTRAC, the AFP, ATO and ACIC. If you require assistance, contact one of our expert criminal defence lawyers