This week the Queensland Attorney-General confirmed that the government will launch an inquiry into The Star Entertainment Group’s ability to continue its operations in Brisbane and the Gold Coast after revelations of money laundering and fraud at its Sydney casino.


The terms of reference of the inquiry will be released after consideration and it remains unclear at this stage whether the review will hold public hearings.


A Queensland inquiry is likely to review similar issues to those addressed by the NSW inquiry, and look into the conduct of those relevant agents to consider whether there is evidence of money laundering or other fraudulent activity.


In Australia, the Anti-Money Laundering and Counter Terrorism Financing Act 2006 governs the obligations of particular businesses in relation to reporting of suspicious transactions and particular threshold transactions.


What are a casino’s obligations?


Under the Australian anti-money laundering and terrorism financing laws, designated services have particular obligations.  Designated services include a range of business activities in the financial services, digital currency exchange and, relevant to this inquiry, the gambling and casino industry.


As a reporting entity, there are a number of obligations in these industries which require reporting entities to report certain transactions and suspicious matters and submit compliance reports to AUSTRAC.  Failures in relation to particular AML/CTF legislation and procedures have penalty consequences, but where there is a suggestion that those regulatory failures raise broader questions about money-laundering activities, more serious criminal offences may arise and require investigation.


What is money laundering?


Money laundering is when ‘dirty’ criminal money is used to facilitate what would otherwise be a lawful transaction. Hence, of course, the term laundering, it’s a metaphorical ‘cleaning’ of money. However, by operation of the fault provisions of the Commonwealth Criminal Code, individuals who are reckless in relation to dealings with the proceeds of crime are captured by the legislation.


The Criminal Code Act 1995 (Cth) stipulates that money laundering occurs when someone ‘deals with’ money or other property. Section 400.2 defines this as:


  • receiving, possessing, concealing or disposing of money or other property; or
  • importing money or other property into, or exporting money or other property from, Australia; and
  • the money or other property which is proceeds of crime, or could become an instrument of crime, in relation to an indictable offence.


Each State and Territory has money laundering offences that typically arise under proceeds of crime legislation. Division 400 of the Criminal Code Act 1995 (Cth) establishes the Commonwealth’s money laundering offences which include offences for dealing with money or property that is or is likely to become proceeds or an instrument of crime.


It is the fault elements of these offences which may cause concern for individuals. Where a person is reckless as to the fact that the money is proceeds of crime or the fact that there is a risk that it will become an instrument of crime, that person would commit an offence. Similarly, where a person is negligent as to the fact that the money is the proceeds of crime, that person commits an offence. The difference between the negligent person, the reckless person and the person who evinces an intention that the money will become an instrument of crime is the maximum penalty involved.  Because these offences are absolute liability offences, the fault elements do not apply to the physical elements of the offence and the defence of mistake of fact is unavailable.


Commissions of Inquiry and Important Safeguards


It is likely that individuals will be compelled to give evidence before the commission of inquiry. Such individuals will need specialist legal advice in order to ensure that their rights and interests are protected. For example, those individuals will need advice about making a claim of privilege against self-incrimination which the Courts have recognised as a substantive right. Ensuring that their answers are covered by a direct or derivate use immunity is also important in order to prevent such evidence being used against them in criminal proceedings.




Designated businesses and reporting entities have particular obligations in relation to the AML/CTF legislation which require ongoing review to ensure compliance.  Where there is evidence that obligations have not been met in relation to domestic and international transaction reports, the regulator’s penalty provisions arise.


However, an inquiry may uncover additional evidence of other offending capable of being referred for prosecution to the appropriate prosecutorial agency. It is important that individuals involved in these designated businesses are aware of their rights and obligations in the face of a government inquiry. The powers of government inquiries can include coercive powers to answer questions which abrogate of the right to claim privilege against self-incrimination.  We will be watching the unfolding Queensland inquiry with interest.


If you would like to learn more about the AML/CTF legislation, please see our publications here.



Written by Dan Rogers and Emma Higgins