Money laundering cases are becoming increasingly complex with the use of sophisticated methods and technologies to facilitate crimes.
Explore a range of money laundering cases investigated by AUSTRAC.
What is AUSTRAC?
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is responsible for preventing, detecting and responding to criminal abuse of the financial system. AUSTRAC aims to strengthen the financial system by using financial intelligence and regulation to disrupt money laundering, terrorism financing, and other serious crime.
Money laundering case studies
Explore a range of money laundering case studies investigated by AUSTRAC relating to the use of digital currency, professional facilitators, alternative remittance services, cyber-enabled crime, and tax crime.
Money laundering case study 1: Digital currency
AUSTRAC was part of an investigation which led to the arrest of an individual who used digital currency to purchase, import and sell prohibited drugs through a black market website.
AUSTRAC uncovered multiple international funds transfers made by the suspect to a digital currency exchange to purchase digital currency. The funds were transferred via banks to an online digital currency exchange based overseas, allowing the suspect to purchase an amount of digital currency.
The suspect was successfully charged and convicted with drug importation and trafficking offences.
Digital currencies such as Bitcoin are commonly used to facilitate money laundering as they provide a degree of anonymity for users.
If digital currencies offer anonymity, how does AUSTRAC detect money laundering?
Financial activity relating to the use of digital currencies may be indirectly visible to AUSTRAC via the regulated anti-money laundering (AML) / combating terrorism funding (CTF) sector.
For example, when digital currency-related transactions intersect with the mainstream regulated AML/CTF sector they can generate reportable transactions such as:
- Reports of IFTIs between Australian accounts and foreign accounts for the purchase/sale of digital currencies.
- Threshold transaction reports (TTRs) for cash deposits/withdrawals of AUD 10,000 or more involving the bank accounts of digital currency exchange providers.
- Suspicious matter reports (SMRs) submitted where reporting entities consider financial activity involving a digital currency exchange to be suspicious.
Case study 2: Professional facilitators
Professionals such as lawyers and accountants are often used to facilitate money laundering.
AUSTRAC investigations revealed that over a two-year period, an account held by the main suspect received more than 80 “structured” cash deposits, as a well as a small number of cheque deposits. These are small deposits of amounts below the required reporting threshold, which are made to circumvent the reporting requirements.
AUSTRAC’s financial intelligence linked the suspect to approximately 50 companies and revealed that the structured cash deposits into the suspect’s account were made on behalf of both companies and individuals.
The cash and cheques were deposited into an account held by the suspect, an accountant, who regularly consolidated the funds from the various deposits and transferred the funds electronically to third parties. Although the exact source of the funds is unknown, authorities identified possible links between the funds and the importation of drugs into Australia.
Case study 3: Alternative remittance services
AUSTRAC provided financial intelligence which assisted an investigation into an alternative remittance service suspected of laundering funds for criminal syndicates.
The remittance company reported sending AU $6 million to Iran and Iraq on behalf of legitimate customers. However, a comparison with reports generated by banks which dealt with the remittance business as a customer showed that the remitter only sent AU $3.66 million, resulting in a shortfall of AU $2.34 million. In addition, data from the bank also showed that the remitter made significant cash deposits totalling AU $3.14 million.
The director of the remittance company was charged and pleaded guilty to dealing with money reasonably suspected to be the proceeds of crime.
Case study 4: Cyber-enabled crime
How is the internet (encryption, access to IDs, international banking) used for money laundering?
The suspect was wanted in the United States for cybercrime and fraud-related offences, where it was alleged that he was part of an organised crime group that stole more than US $30 million from victims in the U.S. through an elaborate home equity line-of-credit fraud.
Australian authorities analysed three SMRs submitted by reporting entities, which included information about multiple aliases used by the suspect. The suspect held multiple Australian bank accounts in a false name, a joint bank account with a third-party, and a business account for a café he operated.
The SMRs detailed a range of transactions, which reporting entities considered to be suspicious – for example, deposits of large amounts from other countries to the suspect’s Australian bank account which were inconsistent with the café’s established customer profile. The suspect also withdrew large amounts of cash in amounts designed to avoid reporting requirements from various banks in a short period of time.
Case study 5: Laundering proceeds of tax crime
Authorities investigated a tax evasion scheme promoted and facilitated by an accountant in Australia. The scheme consisted of using false invoices and loans to avoid tax. A client of the accountant defrauded the Commonwealth government of AU$ 2 million.
Suspect A and his wife were directors and shareholders of Company 1. Suspect A was also director and shareholder of Company 2, with an associate of his as co-director. The accountant controlled Company 3, which was registered in Hong Kong and had a bank account in Australia. Company 3 was used to issue false invoices to Company 1 and 2.
False invoices for “brokering services” were issued by Company 3 to Companies 1 and 2, which paid those invoices. The accountant then took a small portion as payment for his role, and returned that money through various transactions designed to evade tax reporting requirements to Suspect A and individuals associated with him.
How can we help you?
The investigation and prosecution of money laundering has become a global phenomenon where law enforcement agencies routinely share information to assist other jurisdictions. This has been in response to globalisation and the digital revolution which allows money to be transferred more quickly than ever before.
However, the sharing of information or misinformation to foreign states that do not abide by the rule of law or do not have the same legal system as Australia’s raises considerable complexity for those being investigated. Their rights may be compromised, and they may have little recourse to having information that is incorrect being rectified. Such people may face extradition and the possibility of double punishment.
Nyman Gibson Miralis has expertise in international money laundering investigations and has provided strategic advice and representation to those who are being investigated and prosecuted, whether in Australia alone, or in multiple jurisdictions where there may be parallel investigations including the U.S., U.K., E.U., China, Hong Kong, Singapore, South Korea, Russia and Cyprus.
This is an area of law that requires the expertise of specialised international criminal lawyers.
Contact us if you require assistance.