AUSTRAC information assisted an investigation into individual suspected of carrying more than AUD150,000 cash from China to Australia. A large proportion of the cash was made up of damaged (or 'mutilated') AUD2 coins†.
As required by law, the suspect declared the currency at the airport when he was carrying AUD10,000 or more. However, authorities suspect the individual may have carried even more cash into Australia, but he was not required to report these amounts when they were less than the AUD10,000 reporting threshold for international currency transfers.
Authorities believe the individual purchased the damaged AUD1 and AUD2 coins in China for less than the face value of the coins. He then brought the coins into Australia and, within a week of his arrival, deposited them with banks. When depositing the coins, the suspect attempted to conceal the fact that the coins were damaged. Unaware of the true condition of the coins, the banks then credited the suspect with the full face value of the deposited coins (whereas bearers of 'mutilated' Australian coins are only entitled to receive the scrap metal value of the coins).
After depositing an amount of damaged coins, the suspect would then withdraw the same amount of funds from his account, usually the following day. Occasionally the suspect transferred the funds to another bank account before withdrawing them. On a couple of occasions the suspect also exchanged the cash for gambling chips at a casino, and then converted the funds back into cash after undertaking minimal gambling activity.
Other details of the suspect's financial activities included:
- Over a three-year period, the suspect was the subject of eight suspect transaction reports (SUSTRs) after regularly attending banks to deposit damaged coins in amounts below the AUD10,000 cash transaction reporting threshold.
- In eight years, the suspect deposited approximately AUD300,000 in cash and made cash withdrawals worth the same amount - these transactions were made to or from a number of bank accounts linked to the suspect. These transactions all involved amounts of AUD10,000 or more, and consequently were reported to AUSTRAC in significant cash transaction reports (SCTRs).
- The suspect undertook two cash buy-ins worth approximately AUD43,000 and two chip cash-outs totalling the same amount at a casino*.
- The suspect carried a total of AUD150,000 cash on six flights into Australia from China and AUD11,685 cash on a flight from Australia to China.
- The suspect was the ordering customer for five outgoing international funds transfer instructions (IFTIs) to two beneficiary customers in China totalling AUD47,000.
The law enforcement investigation resulted in the suspect being charged with fraud and money laundering. He was also charged with offences under the Crimes (Currency) Act 1981.
* See Glossary for explanation of chip cash-outs and chip buy-ins.
Fraud; money laundering; structuring of transactions
|Industry||Banking (ADIs); gambling services|
|Report type||IFTI; SCTR; SUSTR|
|Jurisdiction||International - China|
|Designated service||Account and deposit-taking services; gambling services|
Customer undertaking transactions that appear to be inconsistent with their profile and/or transaction history: