Author: Nyman Gibson Miralis
Subject: Anti-Money Laundering and AUSTRAC
Keywords: anti-money laundering and counter-terrorism financing (AML / CTF), organised crime, Financial Transaction Reports Act
Australian Transaction Reports and Analysis Centre (AUSTRAC)
AUSTRAC is Australia’s:
- anti-money laundering and counter-terrorism financing (AML / CTF) regulator
- specialist financial intelligence unit (FIU).
AUSTRAC oversees the compliance of thousands of Australian businesses including:
- financial services providers
- gambling industry
- bullion dealers
- remittance service providers
- cash dealers.
AUSTRAC collects and analyses information provided by businesses about:
- financial transactions
- suspicious matters.
AUSTRAC provides the resulting financial intelligence to ‘partner agencies’ including:
- law enforcement
- national security
- human services
- revenue agencies
- certain international counterparts.
AUSTRAC financial intelligence assists partner agencies and international counterparts in investigating and prosecuting serious criminal activity including:
- money laundering
- terrorism financing
- organised crime
- tax evasion.
AUSTRAC primarily receives and analyses financial information. The resulting financial intelligence is then disseminated to revenue, law enforcement, national security, human services, regulatory and other partner agencies in Australia and overseas.
By identifying potential money laundering and terrorism financing (ML/TF) cases and providing financial intelligence, AUSTRAC plays a vital role in assisting partner agencies to detect ML/TF activity, investigate financial crimes (including tax evasion), and secure prosecutions. This supports national priorities to protect Australia’s security, apprehend criminals, protect the integrity of our financial markets and maximise revenue collection.
As Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regulator, AUSTRAC educates, monitors and works with reporting entities to improve their compliance with the requirements of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Financial Transaction Reports Act 1988. In some circumstances AUSTRAC seeks to enforce compliance with these Acts through more formal mechanisms.
These regulatory activities have two key goals:
1. Assist reporting entities to strengthen their AML/CTF programs so their services are not used by criminals for ML/TF purposes
2. Improve the quantity and quality of transaction reports received by AUSTRAC to assist the FIU and, through it, AUSTRAC’s partner agencies.
Recent AUSTRAC Investigations
Offender convicted of structuring funds to launder money: $1 million recovered
AUSTRAC was alerted to the activities of the offender by a bank, who submitted a Suspicious Matter Report (SMR). Subsequent investigation by AUSTRAC revealed that the offender was deliberately dividing large amounts of cash from his business into smaller amounts before depositing them, in order to avoid threshold reporting requirements. He structured cash deposits totalling more than AU$2.5 million over a five-year period.
Further AUSTRAC information revealed:
1. Over five years, the offender made regular cash deposits into his personal credit card account. These amounts were just below the AU$10,000 cash transaction reporting threshold.
2. In one three-month period, the offender deposited AU$125,000 in cash into his personal credit card account in a series of AU$9,000 deposits.
3. The offender exchanged AU$15,000 in cash from AU$50 notes to AU$100 notes.
4. The offender deposited AU$250,000 in cash and AU$450,000 in cheques, on the same day, into his term deposit account. The cheques were drawn from personal and business accounts held by the offender with another bank.
He was charged with Commonwealth offences relating to structuring transactions and pleaded guilty to all. He was ordered to pay a penalty of over AU$1 million.
International drug importation scheme cracked, trafficker convicted
SMRs were received from a number of remittance service providers relating to one individual, which initiated an investigation by AUSTRAC. These SMRs showed:
1. A higher than normal volume and frequency of international funds transfer instructions (IFTIs),
2. All outgoing IFTIs were paid for in cash, in structured amounts below the AUD10,000 cash reporting threshold,
3. The recording of multiple address details and telephone numbers,
4. Addresses slightly altered or completely different to previous transactions.
AUSTRAC commenced an investigation into these transactions. AUSTRAC identified the overseas beneficiary customers, along with other aliases and identities used by the suspect. AUSTRAC was then able to monitor these aliases and any financial transactions conducted by them. AUSTRAC data showed a correlation between the transfers of funds to Laos, Brazil and Nigeria and the importation of drugs. The suspect was charged and convicted of drug importation offences, and for dealing with the proceeds of crime.
Online transactions led to convictions for child sex offences
AUSTRAC contributed to an investigation into the use of pay-per-view child pornography websites and chatrooms based in the Philippines by Australian suspects.
AUSTRAC prepared financial intelligence assessments to support the investigation on various transactions conducted by two suspects, Suspect A and Suspect B. This investigation uncovered a number of international money transfers sent via remittance service providers to common beneficiaries in countries such as Thailand and the Philippines. These money transfers were frequent and for small amounts; about half were between AU$10 and AU$100, and the other were between AU$10 and AU$1,000.
The two suspects were successfully charged and convicted of child sex offences under Commonwealth and Victorian jurisdictions, and sentenced to jail time with sex offender therapy.
Australia and Colombia join forces to bring down international drug syndicate
Australian and Colombian law enforcement agencies conducted a joint investigation into an international drug syndicate with links to Thailand, Ecuador, Italy, the USA and France.
The syndicate were using couriers to smuggle drugs from Colombia and the USA into Australia. AUSTRAC became involved when they received an SMR from a currency exchange service regarding a customer who was travelling to Colombia and insisting on exchanging Australian dollars for Euros in cash, rather than as a cash passport as suggested by the currency exchange service. The funds exchanged were also below the transaction reporting threshold.
AUSTRAC then analysed the financial activities of other suspects and prepared financial intelligence assessments. Analysis of international funds transfers showed that a number of Australian suspects were linked to the suspect based in Colombia. AUSTRAC also discovered information about an Australian suspect who exchanged AU$11,000 for US$ on the day she departed for the US. She returned to Australia and was discovered carrying 140g of methamphetamine concealed on her person.
As a financial intelligence unit, AUSTRAC was used to share financial intelligence with counterpart authorities in the United States. This information assisted authorities to confirm drug syndicate associations in the United States.
Nyman Gibson Miralis are experts in transnational money laundering investigations, assisting companies and individuals who are the subject of investigations by AUSTRAC, the AFP, ATO and ACIC. If you require assistance, contact one of our expert criminal defence lawyers