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Senior public servants stole $1.7 million from state government

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AUSTRAC assisted law enforcement to investigate two senior public servants charged with stealing more than AUD1.7 million cash from a state government department.

The public servants, who were married, generated false invoices through their own private company for work they never carried out. The suspects submitted the false invoices to a government department, which paid the suspects’ private company for the non-existent services.

At the direction of her husband, the female suspect used companies she controlled to launder the illicit funds by commingling the proceeds of the fraud with legitimate funds generated by the companies. The female suspect dealt with the companies’ accountant and gave him the false impression that the illicit funds paid to the companies had been earned through legitimate sources. Income tax was paid on the illicit funds to give the transactions a further appearance of legitimacy.

A suspect transaction report (SUSTR) submitted to AUSTRAC identified that a number of domestic electronic transfers from a third party, an Australia-based company, were paid into the business accounts of companies owned by both suspects. Once the funds were paid into the couple’s business accounts they were then transferred into personal accounts held in the suspects’ names.

AUSTRAC also received three significant cash transaction reports (SCTR) detailing how the suspects withdrew AUD115,000 cash from their personal accounts over a six-week period.

AUSTRAC prepared a financial assessment report which assisted investigating authorities to identify bank accounts linked to the suspects. Of particular interest to authorities were bank accounts held in the names of the suspects’ children. AUSTRAC information showed that AUD50,000 had been withdrawn from these accounts, withdrawals that authorities suspected had been undertaken by the suspects.

Suspect A was charged with 17 counts of stealing as a servant and was sentenced to eight years jail. Suspect B was charged with 14 counts of stealing as a servant and was sentenced to four years imprisonment.

Offence

  • Fraud (invoice)

Customer

  • Individual

Industry

  • Banking (ADIs)

Channel

  • Electronic

Report type

  • SCTR
  • SUSTR

Jurisdiction

  • Domestic

Designated service

  • Account and deposit-taking services

Indicators

  • Account activity inconsistent with customer profile
  • Cash deposits into business account followed by transfers to personal account
  • Significant cash withdrawals over a short period of time
  • Use of children’s accounts for transactions
  • Use of third-party company accounts in an attempt to lend transactions a veneer of legitimacy
Last modified: 30/07/2015 15:35