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International students used as ‘mules’ in Pacific drug smuggling ring

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An international investigation into drug trafficking revealed a major drug smuggling and money laundering syndicate operating within Australia.

The syndicate operated a sophisticated scheme over a three-year period, using multiple couriers to import cocaine from Colombia to Australia, via New Zealand, the Cook Islands and Tahiti. The syndicate members recruited international students residing in Australia to act as couriers.

The method used by the group to import drugs was:

  • Courier A left Colombia for New Zealand or the Pacific Islands, in possession of cocaine.
  • Courier B flew from Australia to meet Courier A in New Zealand or a Pacific Island nation.
  • Courier A gave the cocaine to Courier B.
  • Courier B travelled back to Australia with the cocaine.
  • This process was repeated multiple times, using many different couriers.

The syndicate routed the drugs through third-party countries so that the couriers could travel back to Australia without their travel records attracting the suspicion of authorities. Over an 18-month period, the syndicate used this method at least eight times.

Law enforcement counterparts in Colombia informed Australian law enforcement authorities of three individuals residing in Australia who were believed to be part of the syndicate.

Six suspect transaction reports (SUSTRs) detailing financial transactions of these individuals and others attracted law enforcement interest. AUSTRAC produced a financial intelligence assessment on the Australia-based entities which revealed previously unidentified members of the syndicate.

The following financial transactions were recorded on AUSTRAC’s database for members of the syndicate during the three-year period:

  • Over a two-month period, six SUSTRs were submitted to AUSTRAC by a foreign exchange service. The SUSTRs identified a group of individuals who, on multiple occasions, exchanged Australian currency for United States currency. The SUSTRs indicated that the transactions appeared to be structured to fall under the AUD10,000 cash transaction reporting threshold. (See Glossary for definition of ‘structuring’.)
  • Over a three-year period, members of the syndicate undertook more than AUD72,000 worth of outgoing international funds transfers. These transactions were primarily sent to beneficiaries in South America and the United States.
  • Over this same period, the syndicate recorded a large value of significant cash transaction reports (SCTRs) for cash deposits and withdrawals and the exchange of foreign currency. Forty-two cash deposits (including the purchase of foreign currency) totalling AUD604,000 and 12 cash withdrawals (including the sale of foreign currency) totalling AUD168,100 were recorded.

International law enforcement agencies worked together to disrupt the activities of the syndicate. The syndicate had planned a one kilogram ‘test’ run to be sent from Colombia to Australia, via a third county. Unknowingly, the syndicate handed the test package to an undercover law enforcement officer. The package was imported to Australia with the knowledge of Australian authorities and a controlled delivery was conducted. Law enforcement officers arrested three people upon the package’s arrival at a domestic address in Australia.

The eight-month international operation resulted in the arrests of 11 members of the syndicate, including two residing in Australia.

One Australia-based syndicate member pleaded guilty to conspiracy to import a commercial quantity of cocaine and was sentenced to 11 years imprisonment. A second member was sentenced to 14 years imprisonment for their involvement.

Offence

  • Drug importation

Customer

  • Individual

Industry

  • Currency exchange
  • Banking (ADIs)

Channel

  • Electronic
  • Physical

Report type

  • IFTI
  • SCTR
  • SUSTR

Jurisdiction

  • Domestic
  • International – Colombia, Pacific Islands, New Zealand, United States

Designated service

  • Account and deposit-taking services
  • Remittance services (foreign exchange)

Indicators

  • International funds transfers to a country of interest
  • Structuring of cash deposits and withdrawals
  • A group of individuals undertaking large structured foreign exchange transactions on multiple occasions
  • Foreign currency purchased in structured cash amounts
  • High-volume account activity involving significant amounts of cash funds
  • High-value cash deposits and withdrawals
Last modified: 30/07/2015 15:36