Australia: Mounties faces civil court over alleged AML breaches
Federal regulators accuse club group of failing to manage criminal risks.
Key points:
– AUSTRAC has commenced civil proceedings against Mounties
– Allegations include systemic non-compliance with AML/CTF laws
– Mounties operates 1,400 poker machines across ten venues
AUSTRAC has launched civil penalty proceedings in the Federal Court against Mount Pritchard District and Community Club, commonly known as Mounties, over what it claims are serious and widespread failures to comply with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
According to AUSTRAC, Mounties provided gaming services without maintaining an AML/CTF program that met the required standards. The regulator alleges the club’s systems were inadequate in areas such as customer risk assessment, transaction monitoring and staff training.
Mounties, which owns 10 venues in New South Wales and earns hundreds of millions of dollars annually through gaming machines, is accused of failing to appropriately monitor customer activity despite known money laundering risks. AUSTRAC alleges Mounties also neglected to ensure its enhanced customer due diligence procedures were functioning effectively.
While Mounties outsourced aspects of its AML/CTF responsibilities to a third-party provider, AUSTRAC maintains that legal obligations under the Act remain with the reporting entity. The regulator warned that relying on external providers without proper oversight presents a high risk of non-compliance, especially in cash-heavy industries.
Good to know: In 2021–22, approximately AU$95bn (US$63.7bn) was gambled on poker machines in New South Wales. Authorities estimate billions of this total were likely to be proceeds of crime
Specific examples have been cited where customers were not properly assessed or monitored, raising concerns that the club’s internal controls were not sufficient to detect or deter criminal exploitation.
The matter has been referred to the Federal Court, which will determine whether breaches occurred and what penalties may be imposed. Court documents will be made available through AUSTRAC’s enforcement actions page once published.
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