Case study summary
Australian law enforcement worked together with Colombian counterparts to dismantle an international drug syndicate with links to Thailand, Ecuador, Italy, USA and France.
AUSTRAC provided financial intelligence which showed the flow of funds between entities and enabled law enforcement to identify and link individuals not previously known to be associated with the drug syndicate. Australian and Columbian authorities coordinated the execution of search warrants arresting syndicate members.
They were charged and convicted of aiding and abetting the importation of a marketable quantity of drugs. They received sentences ranging from two-and-a-half years to eight-and-a-half years imprisonment.
The syndicate used couriers to smuggle drugs from Colombia and the United States into Australia. Authorities also believed the syndicate had drug trafficking links in Thailand and Ecuador.
Authorities identified five Australian suspects and one Colombia-based suspect involved in the syndicate. The Colombia-based suspect supplied the drugs for importation from Colombia to Australia.
AML reporting by two banks, a remitter and foreign exchange dealer assisted with the investigation.
AUSTRAC received a suspicious matter report (SMR) from a currency exchange service. A customer informed staff at the foreign exchange service that he was travelling to Colombia. When staff suggested the customer should use a cash passport in Euro currency, the customer insisted on exchanging Australian dollars for Euros. The funds exchanged were below the transaction reporting threshold. This SMR assisted authorities identify a drug courier recruited by the syndicate.
AUSTRAC analysed the financial activities of several of the suspects and prepared financial intelligence assessments.
In total, more than 360 AUSTRAC transaction reports were relevant to the investigation, consisting of:
- 270 international funds transfer instructions (IFTIs),
- 90 threshold transaction reports (TTRs), and
- one suspicious matter report (SMR).
Analysis of the IFTIs linked a number of Australian suspects and confirmed links to the Colombia-based suspect. AUSTRAC information showed that over a four-year period the Columbia-based suspect was the beneficiary customer of 44 IFTIs totalling AUD214,000, sent via two banks and a remitter. The funds were sent from a number of Australian accounts belonging to entities in Victoria and New South Wales. The IFTIs were sent to bank accounts held by the suspect in Thailand, Colombia, Italy and France, usually in amounts between AUD8,000 and AUD8,500.
AUSTRAC also received a TTR detailing how one suspect exchanged AUD11,000 for United States dollars at a foreign exchange service on the day she departed Australia for the United States. Authorities identified that the suspect was recruited as a 'drug courier' by a syndicate member. The suspect travelled to the United States and returned to Australia having internally concealed 140 grams of methamphetamine. The suspect was paid AUD11,000 for her 'courier services'.
AUSTRAC information also showed that during the month prior to the importation of drugs from the United States one syndicate member sent three outgoing IFTIs totalling AUD10,000 to two beneficiaries in the United States. The IFTIs ranged in value from AUD200 to AUD8,000 and were sent via a bank and remittance services.
Authorities analysed AUSTRAC information and established that syndicate members used associates and family members to send international transfers in structured amounts to accounts in Colombia, Thailand and the United States. While some outgoing IFTIs were sent by associates and family members using false names, the majority were sent using their real names. The outgoing IFTIs ranged in value from AUD200 to AUD5,000 and were sent via banks and remittance services.
AUSTRAC's role as a financial intelligence unit and its information exchange agreements were 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.
In a coordinated operation, Australian and Columbian authorities executed search warrants across a number of premises and arrested the syndicate members.
The suspects were charged and convicted of aiding and abetting the importation of a marketable quantity of drugs. They received sentences ranging from two-and-a-half years to eight-and-a-half years imprisonment.
Figure 1 – Activities in Australia
Figure 2 – Activities in Colombia
Summary and indicators
International – Colombia, Ecuador, France, Italy, Thailand, United States
|Designated service||Account and deposit-taking services
Remittance services (foreign exchange)
Remittance services (money transfers)
|Indicators||International funds transfers to a country of interest
International funds transfers were sent in apparently ‘structured’ amounts
Foreign exchange customers insisting on receiving physical currency, rather than other products offering more benefits/features
Multiple international funds transfers sent to a common overseas beneficiary from multiple Australian accounts