Casino Malta fined for AML failings
The land-based casino has been fined by Malta’s Financial Intelligence Action Unit for a series of breaches.
Malta.- The operator of Casino Malta has been fined €233,834 for a series of anti-money laundering and counter-terrorist financing failings. The government’s Financial Intelligence Action Unit (FIAU) found the operator lacked sufficient due diligence and inadequate risk assessment procedures.
The agency highlighted the case of a CEO with connections to Turkey who was able to spend €1m at Casino Malta, mostly in cash, without his sources of funds being checked. The money came from eight different bank accounts.
The casino put notes on his player profile advising to check the player’s identification documentation on his next visit, but no notes were made about collecting information on the sources of his funds.
The FIAU concluded that the casino “should have carried out additional measures such as obtaining documentation as to this player’s source of wealth (SOW) as well as the income earned, and other returns generated through his employment/businesses”.
Another case highlighted involved a student with connections to China who was able to spend €200,000 and lose €80,000 between January and December 2019 without their source of funds being checked.
The FIAU said that “it was not provided with any reassurance as to how a student could afford such substantial gaming activity/deposit in a relatively short period of time”.
The FIAU also found systematic problems in the casino’s internal risk classification methodology. It found that of the player profiles it reviewed, 22 per cent of those given a low or medium risk rating made transactions of higher amounts than would be expected for such a risk rating. One such customer spent €2m and lost €900,000 between 2016 and 2019.
“This customer activity should have triggered the company not only to carry out an update of the risk rating, but independently of the rating to carry out the necessary enhanced measures to manage the risks of such activity,” the report reads.
The FIAU noted that ensuring funds come from a legitimate bank account was important but not sufficient to mitigate an individual’s risks since verification of the account “does not identify nor evidence the source of funds but simply outlines the flow of funds”.
Another case involved a former politically exposed person who was categorised as low-risk despite their status. The person was later found to have allegedly been involved in bribery and tax evasion.
The FIAU found that Casino Malta’s guidelines did not provide employees with sufficient detail on what course of action to take to report suspected money laundering. It cited the case of a player who defined their profession as a “plasterer” but was able to gamble significant sums while a freezing order was in place due to court proceedings for drug trafficking.
It said: “The company, although unaware of the freezing order, knew of the ongoing court proceedings against the customer. Notwithstanding this, the company never submitted a suspicious transaction report (STR) to the FIAU in relation to this and continued to allow the player to wager substantial amounts.”
In June last year, the G7’s anti-money laundering (AML) watchdog the Financial Action Task Force (FATF) removed Malta from its “greylist” of untrustworthy jurisdictions. Prime minister Robert Abela ordered an overhaul of the Financial Intelligence Analysis Unit (FIAU) and the creation of a new company register to show transparency of ownership and assets.
The FIAU has ordered Malta-domiciled businesses to follow its revised AML regulations that include new procedures for customer due diligence, reporting, outsourcing, staff training and vetting, record keeping and interactions with “non-reputable jurisdictions”. Maltese businesses were also ordered to disclose beneficial ownership in corporate structures.
See also: MGA signs data agreement with Badminton World Federation Integrity Unit
