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International crime syndicate used underground banking to launder massive drug profits

Image of methamphetamine crystals

AUSTRAC assisted an investigation which disrupted a global crime syndicate involved in money laundering and the importation of more than 30 kilograms of methamphetamine into Australia.

Three suspects were arrested and charged with importing a commercial quantity of a border controlled drug.

The syndicate operated a 'hawala'-type remittance system with cells based in Australia, the United Arab Emirates (UAE) and Nigeria. The syndicate head was located in Lebanon.

The cells in Australia were headed by an Iranian national (suspect A) and an Iraqi-born Australian citizen (suspect B). The head of the syndicate coordinated the distribution of cash payments from drug trafficking networks operating in Australia to suspects A and B.

Suspect A operated a business in the Iranian community facilitating the immigration of Iranian nationals to Australia and other countries. Most of suspect A's financial activity involved large cash deposits (reported to AUSTRAC as threshold transactions reports, or TTRs) and regular incoming international funds transfer instructions (IFTIs) from companies in Canada, Iran, Slovenia, the UAE and Turkey.

TTRs received by AUSTRAC showed that, over a six-year period, suspect A received AUD715,000 in large cash deposits, while AUD63,000 cash was withdrawn from bank accounts associated with the suspect. Over that same period, the suspect and his company were the beneficiary of 41 incoming IFTIs totalling AUD521,000.

Suspect A was also the subject of two suspicious matter reports (SMRs) submitted by a bank. The SMRs described the various activities observed that gave it grounds for suspicion:

  • suspect A's unusual account activity
  • funds being sent to/received from high-risk jurisdictions
  • large cash deposits made at different bank branches on the same day
  • third parties making cash deposits into suspect A's account.

Over a one-year period suspect B was the ordering customer for 56 outgoing IFTIs totalling AUD244,000. Suspect B sent the funds to approximately 38 overseas-based beneficiary customers in 12 different countries, with the top five countries being the United States, Lebanon, China, Luxembourg and Syria. All but six IFTIs were conducted through remittance dealers. Over the one-year period suspect B conducted multiple 'same-day' IFTIs, on the majority of occasions conducting the transactions through different remitters.

Suspect B was also the subject of two SMR reports submitted by a bank, detailing the following activity:

  • Suspect B deposited cash into third-party bank accounts, with one beneficiary account holder identified to be an Iranian national without any work entitlements in Australia.
  • The suspect's trading account received regular large cash deposits, which were followed by cheque withdrawals issued to third parties.
  • Suspect B's mortgage account exhibited unusual transaction behaviour, being used for very large cash deposits and withdrawals (worth hundreds of thousands of dollars).
  • The suspect made many large cash deposits; behaviour which was inconsistent with the suspect's claimed occupation as a shop assistant.

Law enforcement also investigated the activities of a third suspect, suspect C, because of his involvement with a suspected money launderer. Authorities believe that suspect C arranged to transfer AUD300,000 to Mexico using the unregistered remittance service provided by suspect B. Suspect B was not registered with AUSTRAC as a remittance service provider.

Suspect C was arrested as he was departing Australia on a flight to Mexico. In his possession was USD9500, AUD660, two diamonds valued at AUD50,000 each and casino chips valued at AUD170,000.

A search of the AUSTRAC database showed that suspect C had a gambling turnover of AUD11 million over a three-month period. Suspect C was also the subject of four SMRs, which detailed his unusual gambling activity and practice of making cash deposits in amounts just below the AUD10,000 reporting threshold. The suspect conducted multiple, same-day gambling-related transactions on a regular basis. The gambling-related transactions were in close succession, which suggested the suspect was undertaking a bare minimum of gambling in between transactions.

The three suspects were arrested and charged with importing a commercial quantity of a border controlled drug contrary to the Criminal Code Act 1995. Suspect C was also charged with dealing in money or property valued in excess of AUD100,000, which is believed to be the proceeds of crime, contrary to section 400.4 of the Criminal Code Act.

  • Drug trafficking
  • Money laundering
  • Individual
  • Business
  • Banking (ADI)
  • Gambling services
  • Remittance services
  • Electronic
  • Physical
Report type
  • IFTI
  • SMR
  • TTR
Jurisdiction International – primarily Canada, Iran, Lebanon, Mexico, Nigeria, Slovenia, Syria, Turkey, United Arab Emirates
Designated service
  • Account and deposit-taking services
  • Gambling services
  • Remittance services (money transfers)
  • Cash deposits into third-party accounts
  • High-value transactions inconsistent with customer profile
  • High-value/volume gambling transactions with minimal gambling activity
  • International funds transfers to high-risk jurisdictions
  • Large cash deposits made at different bank branches on the same day
  • Multiple same-day gambling activity
  • Unusual transaction activity through business accounts, suggesting the account is being used for unregistered remittance activity
Last modified: 30/07/2015 15:35