AUSTRAC assisted Australian law enforcement agencies with a money laundering investigation involving several Romanian-born Australian citizens who were suspected of trafficking and distributing drugs, and dealing with the illicit proceeds of these activities.
AUSTRAC analysed international funds transfers instructions (IFTIs) and suspicious matter reports (SMRs) submitted by its industry partners. These reports identified individuals structuring their international funds transfers through multiple remittance agents. As a result of AUSTRAC's analysis, authorities were able to identify the key member of the money laundering and drug trafficking syndicate.
The main offender was charged with money laundering and failing to declare physical currency in excess of AUD10,000 whean leaving Australia.
He pleaded guilty to the above mentioned charges and was subsequently sentenced to seven years and four months' imprisonment.
The following indicators may help identify similar criminal activity:
- Multiple ordering customers sending IFTIs to common beneficiary customers in Romania.
- Multiple IFTIs structured in amounts of less than AUD 10,000 in order to avoid cash threshold reporting obligations.
- Multiple IFTIs sent by a single ordering customer on the same day, at different agent locations of the same remitter.
- The ordering customer of the IFTIs is also the receiving beneficiary overseas.
- Customers attempt to use false identification details when conducting IFTIs, identified by a variation in the addresses, phone numbers and dates of birth used when conducting transactions at separate remittance agent locations.
Members of the money laundering and drug trafficking syndicate were identified as a result of AUSTRAC analysis of outgoing IFTIs to Romania, which were believed to be funding narcotics importations to Australia. The analysis identified several Australian-based suspects who were believed to be assisting the key member to move funds for the syndicate.
The suspected members of the syndicate usually made multiple transactions on the same day at nearby outlets/branches to common Romanian-based beneficiary customers. It was also identified that sometimes they would remit the funds to their own offshore accounts.
Over a period of three-and-a-half years, 46 suspicious matter reports (SMRs) were submitted to AUSTRAC detailing suspicious financial transactions undertaken by the suspects.
IFTIs submitted by the banking and remittance sector identified that the suspected members of the syndicate primarily used the remittance sector to facilitate the majority of their outgoing funds transfers.
The SMRs identified a number of characteristics common to most of the outgoing transfers:
- Transfers were sent to common beneficiaries in Romania, who were members of the syndicate.
- Transfers were usually conducted in cash amounts of less than AUD10,000, believed to be intentional attempts to avoid detection by reporting entities.
- Over a 12-month period, the syndicate members sent more than AUD840,000; primarily in structured amounts between AUD6,000 and AUD9,000.
- Suspects were supplying multiple addresses, phone numbers and dates of birth when conducting transactions at separate remittance agent locations.
AUSTRAC analysis revealed that over a 12-month period, the key member of the syndicate in Australia transferred more than AUD500,000 to overseas beneficiary customers, mostly in Romania. Based on the nature and total value of the IFTIs sent to Romania, it was deemed likely that the funds were derived from proceeds of crime in Australia and to possibly fund further narcotic importation activities.
The transactions were usually conducted in amounts averaging AUD8,500 and multiple international transfers were conducted each day at several remittance agents located within close proximity to each other.
AUSTRAC's analysis of the outgoing IFTIs submitted by the banking and remittance sector helped identify that the syndicate members remitted more than AUD1 million offshore over the past two years.
Further AUSTRAC information revealed:
- AUSTRAC's analysis of the SMRs looking at IFTIs to Romania linked this financial activity to the syndicate
- the flow of IFTIs to common beneficiaries in Romania also triggered AUSTRAC's automated monitoring system, which assisted in identifying members of the syndicate.
The key syndicate member was arrested by law enforcement as he attempted to leave Australia while carrying the cash equivalent of AUD11,200. He was charged with:
- one count of dealing the value of the money or property was AUD100,000 or more, contrary to section 400.4(1) of the Criminal Code Act 1995
- one count of moving physical currency of not less than AUD10,000 out of Australia without a report in respect of the said movement, in accordance with section 53 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), contrary to subsection 53(1) of that Act.
He pleaded guilty to money laundering offences and failing to declare physical currency in excess of AUD10,000 when leaving Australia. He was sentenced to seven years and four months' imprisonment.
Case study summary
International – Romania
Account and deposit-taking services
Remittance services (money transfers)