A few days after having its offices raided by law enforcement officials, and one day after a hold was put on its stocks, Australian bookmaker IASbet released a statement Tuesday regarding the troubles surrounding the company.
Friday's orchestrated raids at IASbet offices in Melbourne and Darwin and at the home of the company's chief, Mark Read, were part of an ongoing investigation into the betting habits of a former Commonwealth Bank Karratha branch manager Kim Faithfull.
Faithfull, 36, is serving a five-year jail term for stealing more than $19 million from the bank and squandering it on bets placed with IASbet. Darwin detectives searched IASbet's offices at Fannie Bay Racecourse, while WA and Victorian officers searched IASbet's office in the Rialto Tower.
Roger Smeed, IASbet's chief executive, on Monday requested a halt on trading of the company's stock until the company could release a statement, which came after the markets closed that afternoon.
The statement confirmed that the raids had taken place and that the company is cooperating with law enforcement.
"The company confirms that a few documents and some computer records were provided to the police to assist them with their inquiries," the statement read.
Numerous Australian publications reported that police sources have confirmed that members of IASbet's staff were interviewed in conjunction with the raid and turned over documents.
The head of the squad, Detective Sergeant Paul Langdon, said police were investigating the circumstances in which IASbet obtained money stolen by Faithfull and whether they behaved responsibly in accepting the money.
The company said it had operated its business within the proper regulatory framework, and that although it continued to accept wagers from Faithfull, it wasn't privy to the origins of the money, nor was it the responsible for ensuring it wasn't dirty money.
Company officials were taken off guard by the raids, considering the Northern Territory Racing, Gaming and Licensing Commission already investigated the matter last year.
The commission exonerated the online bookmaker and issued a report on the investigation.
"The commission is unable to see that the licensee should have or was lawfully able to have gone behind the client's reasonable explanation of the source of his apparent wealth," the report stated. "On the material before it, the commission is unable to find any breach of relevant regulatory regime on the part of the licensee, nor any culpable shortcomings in corporate governance."
Faithfull's betting binge came to light in October, and IASbet's stock has since tanked. It was trading at $1.45 per share before the controversy came to light and had dropped to $0.84 at the time trading was halted Monday. More than $33 million has been wiped from the company's value.
For five years, Faithfull used a bank computer to transfer the stolen money to an IASbet betting account in Darwin, gambling up to $400,000 a week.
His thefts were not detected until he gave himself up. He was sentenced to five years in jail. He told detectives that IASbet knew he was a bank manager.
The bookmaker contacted Faithfull at the Karratha bank and offered him free tickets to the Melbourne Cup after he had been betting with them for some time. He turned down the free ticket to Australia's biggest horserace but was sent a case of Grange Hermitage wine.
IASbet has contended that while they knew Faithfull was a banker, it was a logical assumption that he was wealthy enough to be funding his betting habits through his salary and other investments and not from embezzling money from the bank.
David Murray, chief executive of the Commonwealth Bank, said the bank would take action to recover the stolen funds.
Sportingbet.com, another online bookmaker doing business with Australian punters, is embroiled in a similar case in which one of its punters spent company funds from his transportation firm to fund his betting account on the site.