Betfred is paying a compensation package of £ 322,000 after getting a tip-off from the UK Gambling Commission that a convicted fraudster was investing stolen money through several betting operators.
The case involves Petfre (Gibraltar) Limited, trading as Betfred and owner of a joint remote operating license, which was found to have shortcomings in its procedures for anti-money laundering.
Following information passed to the Commission on a consumer convicted of a £ 2 m fraud, an investigation was launched that was said to spend stolen money through several companies, including Petfre.
It was subsequently found that several betting accounts had been opened by the consumer in a very short time, making large deposits and experiencing serious losses. With regard to Petfre, he invested £ 210,000 over a 12-day period in November 2017 and lost £ 140,000.
In a regulatory statement the UKGC explained: “The management of this customer in relation to anti-money laundering raised significant concerns regarding the effectiveness of the policies and procedures that Petfre had in place, and its management of risks to the licensing objectives. Since this incident Petfre has made improvements to its AML procedures to prevent a recurrence of the failings.”
It was added that, during the month in question, operator policies led the firm to demand source of funds on two occasions, which were not duly given. This resulted in the two big deposits identified by the UKGC who state: “clearly indicated failings in the effectiveness of Petfre’s policies and procedures”.
Petfre recognized and admitted deficiencies in the implementation of its AML regulations and its policies and procedures, and agreed that it had failed to act in compliance with the License Conditions and Codes of Practice, as well as the Commission’s guidance to operators under the Proceeds of Crime Act 2002.
Petfre is to divest themselves from the net gambling yield of £ 140,000 that they received as a result of the betting, with the cash being returned to the victim in question.
In addition, a fee is to be made instead of a monetary penalty of £ 182,000 to facilitate the implementation of the National Strategy for Reducing Gambling Harms, with an additional £ 15,168.42 to be charged for the investigation costs of the Commission.