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Case studies - currency exchange services

Case 18 - Currency exchange dealer jailed for assisting money launderer

The manager of a foreign exchange business received a jail sentence after being convicted of providing false information and assisting another suspect to avoid legislated reporting requirements.

The suspect visited the manager's foreign exchange business in Sydney to purchase AUD43,000 worth of traveller cheques, with the cheques requested in US dollars (USD). During the transaction the suspect paid AUD14,000 as a 'deposit' for the purchase, and then indicated he did not intend to fill out any forms associated with the transaction.

A meeting was arranged between the suspect and the owner/manager of the foreign exchange business. During this meeting the suspect and the manager negotiated an agreement in which the suspect received a lower AUD to USD exchange rate for his purchase of the cheques. In return, the manager agreed to circumvent the reporting obligations normally required for a cash transaction of AUD10,000 or more by not submitting a significant cash transaction report (SCTR) to AUSTRAC.

The suspect returned to the foreign exchange business a few days later, where he was instructed to provide names for the travellers cheques and asked to fill out purchase records and sales receipts for the purchase. The suspect completed the documents under a number of different names. The suspect purchased a number of travellers cheques worth USD100 and USD1,000 each using various different names and addresses. In total, the suspect purchased cheques worth USD26,500, after paying the exchange business AUD43,600 cash.

Following a law enforcement investigation, the manager and his foreign exchange business were prosecuted for providing false information to AUSTRAC and avoiding reporting requirements. The manager was sentenced to 10 months jail and his foreign exchange business was fined AUD100,000.

Offence
  • Money laundering
Customer
  • Business; individual
Industry
  • Currency exchange
Channel
  • Physical
Jurisdiction
  • Domestic
Designated service
  • Currency exchange services; travellers cheques exchange services
Indicators
  • Customer refuses to complete the documentation required to complete the transaction
  • Purchase of multiple travellers cheques
  • Structuring of transactions to avoid reporting requirements
  • Use of false identification documentation
Last modified: 28/11/2014 16:37