FIAU investigation finds Trannel International Limited breached multiple regulations as it hands downs €222,736 penalty
Malta’s Financial Intelligence Analysis Unit (FIAU) issued a penalty of €222,736 and reprimanded Kindred-owned Trannel International Limited for anti-money laundering (AML) failings.
An examination was carried out in October 2020 and found multiple breaches of regulation, including inadequate customer risk assessments (CRA), which were deemed to have “several shortcomings” including a lack of a holistic risk assessment process and overweighted consideration on some risks and not others.
During the examination, the FIAU found a high-risk player made deposits of around €300,000 and made losses amounting to over €200,000 over a period of less than three months.
A review of the player was carried out by the operator’s AML team, but that was only after the player had already lost over €70,000.
A background check revealed the player had several companies registered in their name, including one that had been through bankruptcy. However, there was no record of his salary earnings.
It was also noted that the player’s deposits increased from €8,000 in their first month of playing to €120,000 the following month.
These findings should have triggered a source of wealth or source of funds check but that did not happen, according to the FIAU’s examination.
A second high-risk player deposited €3.5m and reached a net deposit of €750,000 using 12 different payment methods in less than 18 months.
A source of wealth check, completed one month later, found the player was a “merchant for goods/services” and made €20,000 per month.
Though a tax return provided by the player showed their total income and assets amounted to over €3m, “most of the listed assets were relatively non-liquid”, according to the FIAU.
Overall, the FIAU asserted the player’s activity was “inconsistent” with his income and therefore “the company was expected to apply adequate enhanced due diligence measures and scrutinise the player’s transactions”.
The FIAU did acknowledge that Trannel did “proactively remediate” the failings found following the October examination.
The intelligence unit further added that the firm overhauled its AML/CTF (counter-terrorism financing) procedures and noted the company was implementing financial triggers for high-spending players when they first sign up, which would flag them and lead to more information being collected.
In its statement, the FIAU said: “In relation to the specific player profiles for which breaches were identified in relation to these three obligations, the committee observed that in most instances, the company took remedial action by retrospectively reassessing the players’ profiles and closing the implicated accounts.
“It is essential to highlight that the breaches related to the purpose and intended nature of the business represent a failure to implement appropriate measures for player profiles displaying high risk elements and characteristics.
“For this reason, the committee determined that a combined administrative penalty covering both these breaches should be imposed.
“However, a separate administrative penalty was deemed necessary for the specific breach concerning transaction monitoring.
“This is because when considering the player profiles in question, the company was required to scrutinise the transactions involved given their high value and rapid velocity,” the statement concluded.
As it stands, the €222,736 penalty is currently not final and can be appealed by Kindred.
Kindred did not provide a comment when approached by EGR.