A crack investigation team within NSW Liquor and Gaming charged with detecting money laundering incidents at hotels and clubs has been quietly scaled back after identifying clubs that have been targeted by criminals, and the ongoing money laundering investigation has been suspended.
The unit, which also included ex-police officers and financial crime specialists, had identified groups suspected of having links to organized crime and operating the poker machines in a manner indicative of money laundering. This included depositing and withdrawing money without playing or with minimal play, or distributing their winnings to a central person. It also revealed potential connections between those players and employees of the clubs.
NSW Liquor and Gaming expanded its investigative unit to about 10 staff in October 2021 with the support of the then NSW Gaming Secretary Victor Dominello, who empowered NSW Liquor and Gaming to investigate money laundering in pubs and clubs after having oversaw the establishment of Crown and Star casino royal commissions.
Focusing on suspicious behavior rather than individual clubs, the team identified Cabra Vale Diggers, Canley Heights RSL, Canterbury Leagues Club, Fairfield City Memorial Club, North Sydney Leagues Club (Norths), Parramatta Leagues Club, South Sydney Juniors and Mount Pritchard Community Club (Mounties) as locations particularly targeted by alleged money launderers. Some clubs cooperated with the investigators’ requests for CCTV footage and other information, while others went on the defensive.
The team was also involved in a post-lockdown operation with the NSW Crime Commission and the Australian Criminal Intelligence Commission that analyzed transactions in the three weeks after the sites reopened and it was believed that criminals would start laundering the money they had collected. . That investigation identified $5.5 million in suspicious transactions.
But the unit was scaled back in February, two months after Kevin Anderson replaced Dominello as the NSW minister in charge of gaming and the department’s priorities shifted. NSW Liquor and Gaming left Dominello’s Customer Service portfolio to Anderson’s Enterprise division, and a new chief executive was appointed.
Two sources familiar with the unit said ongoing work on money laundering was subsequently halted. Money laundering investigations were deemed to be outside the purview of a regulatory authority and more appropriately conducted by AUSTRAC or the police. Some team members changed departments and the rest of the staff was reoriented to less dynamic work.
The evidence it gathered on money laundering had been forwarded periodically to the NSW Crime Commission, which by then had begun its own high-level investigation into the nature and extent of money laundering in licensed premises and possible regulatory vulnerabilities. . This would not happen again.