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Suspicious funds transfers to Mexico unearthed million dollar drug trafficking syndicate

Image of man holding packet of methamphetamine

A suspicious matter report contributed significantly to a law enforcement operation which ultimately dismantled an international drug importation syndicate operating in Australia.

Authorities used AUSTRAC information to identify individuals of interest, establish links between syndicate members, support existing intelligence and identify financial transactions of interest to authorities.

Two suspects were convicted of attempting to possess commercial quantities of unlawfully imported border controlled drugs. One was sentenced to eight years and six months imprisonment, the other was sentenced to 17 years imprisonment.

The syndicate imported into Australia 14 kilograms of cocaine and 133 kilograms of methamphetamine with a combined estimated value of AUD14 million. The drugs were concealed in beer bottles in a consignment sent from Mexico.

The initial SMR disseminated by AUSTRAC to authorities detailed the financial activities of an individual who was later found to a member of the syndicate. The individual was found to be associated with two suspects (A and B) who were also members of the syndicate. The SMR included the following information:

  • Over a four-day period the individual sent two international funds transfer instructions (IFTIs) of AUD9,000 each to Mexico.
  • The funds transfers were paid for with cash.
  • The transfers were seemingly 'structured' into amounts of less than AUD10,000 to avoid the threshold transaction reporting requirements.

The SMR, combined with intelligence received from other authorities, prompted AUSTRAC to produce a financial intelligence report for its law enforcement partners detailing the financial activities of the syndicate.

AUSTRAC information was a significant source of intelligence used by authorities to identify links between key syndicate members. The information helped authorities link suspects who had not previously been associated with each other, including suspects A and B.

Large cash deposits expose suspects A and B

Analysis of AUSTRAC information identified a number of threshold transaction reports (TTRs) which detailed large cash deposits made by suspect A. AUSTRAC information showed that:

  • one year prior to the importation, suspect A made two cash deposits, worth AUD10,000 and AUD150,000, into his accounts on two different days
  • in the four months preceding the importation, suspect A deposited approximately AUD160,000 cash into his accounts, staggered over four days. The value per transaction ranged between AUD10,000 and AUD70,000
  • in the month preceding the importation, suspect A deposited AUD25,000 cash into his account
  • a cash deposit funded an international funds transfer of AUD50,000 to an account in Turkey in the name of suspect A.

These deposits were believed to be illicit funds associated with the importation of drugs.

Analysis of AUSTRAC information also showed that two years prior to the importation suspect B deposited AUD130,000 cash into his personal bank accounts. The value per transaction ranged between AUD15,000 and AUD60,900. These transactions were reported to AUSTRAC via TTRs and significant cash transaction reports (SCTRs).

Searches of the AUSTRAC database revealed that members of the syndicate sent high-value IFTIs to various overseas beneficiaries:

  • They transferred a total of AUD245,000 to multiple beneficiaries in Mexico over a three-year period. The value per transaction ranged from AUD200 to AUD9,000. The IFTIs were sent via remittance services and a financial institution.
  • Syndicate members sent IFTIs totalling AUD1 million to an account in Turkey held in the name of suspect A. The value per transaction ranged from approximately AUD47,000 to AUD237,000. The funds were sent via banks over a 10-month period in the year preceding the importation.  

Australian authorities received information from international counterparts in Turkey which revealed that the majority of the funds transferred to Turkey were transferred onwards to Mexico. Authorities believe these funds were transferred to Mexico to fund the drug importation. Suspect A withdrew approximately USD107,000 cash from his account while visiting Turkey.

Authorities executed search warrants on several properties and seized six kilograms of methamphetamine, weapons and ammunition. Also seized from suspect A's residential property were approximately 39 cases of empty beer bottles. Suspects A and B were arrested during the operation.

Suspects A and B were both convicted of attempting to possess commercial quantities of unlawfully imported border controlled drugs, namely cocaine and methamphetamine, contrary to the Criminal Code Act 1995.

Suspect A was sentenced to eight years and six months imprisonment, while suspect B was sentenced to 17 years imprisonment.

Offence Drug importation
Customer Individual
Industry
  • Banking (ADIs)
  • Remittance services
Channel
  • Electronic
  • Physical
Report type
  • IFTI
  • SCTR
  • SMR
  • TTR
Jurisdiction International – Mexico, Turkey
Designated service
  • Account and deposit-taking services
  • Gambling services
  • Remittance services (money transfers)
Indicators
  • Cash used to pay for international funds transfers
  • High-value cash deposits
  • High-volume account activity involving significant amounts of cash funds
  • International funds transfers where an individual is both the ordering and beneficiary customer
  • Large cash withdrawals in a high-risk jurisdiction
  • Multiple customers conducting international funds transfers to the same overseas beneficiary
  • Multiple international funds transfers to high-risk jurisdictions (10)
  • Regular or multiple cash deposits just below the AUD10,000 cash transaction reporting threshold
Last modified: 30/07/2015 15:36