Go to top of page

Case studies - Remittance services (money transfers)

Contents


Case 15 – Suspect stockpiled illegal firearms and explosives

Law enforcement identified a suspect who appeared to be importing components used to build or modify a prohibited type of assault rifle. Authorities used AUSTRAC information to identify the suspect's online payment account and other associated financial activity.

The suspect was arrested and charged with various firearms offences.

Law enforcement consulted a number of data sources including the AUSTRAC database to further their investigation. AUSTRAC identified the suspect's online payment account and other associated financial activity. Once this account information was identified, law enforcement approached the relevant online payment providers to obtain the suspect's account details and other identifying information.

AUSTRAC information revealed that, over a five-year period, the suspect had sent approximately 160 low-value international funds transfer instructions (IFTIs) totalling AUD15,500. All IFTIs were below AUD1,000 and were sent via an online payment service to various overseas destinations.

The information provided by AUSTRAC, along with data from other sources, enabled law enforcement officers to obtain a search warrant for the suspect's residence.

During the search law enforcement seized two revolvers, a sawn-off shotgun, a rifle, various parts for assault rifles and other assorted gun parts, most of which had been imported illegally from overseas. The officers also found equipment to manufacture guns, hundreds of rounds of ammunition, body armour, machetes, three hand grenades, a claymore mine and an improvised explosive device.

The suspect was arrested and charged with various firearms offences under the Firearms Act 1996 (NSW) including possessing, using, storing and manufacturing firearms.

Offence

Firearm importation

Customer

Individual

Industry

Remittance services

Channel

Electronic

Report type

IFTI

Jurisdiction

International

Designated service

Remittance services (money transfers)

Indicators

Low-value international funds transfers


Case 16 – International crime syndicate used underground banking to launder massive drug profits

AUSTRAC assisted an investigation which disrupted a global crime syndicate involved in money laundering and the importation of more than 30 kilograms of methamphetamine into Australia.

Three suspects were arrested and charged with importing a commercial quantity of a border controlled drug.

The syndicate operated a 'hawala'-type remittance system with cells based in Australia, the United Arab Emirates (UAE) and Nigeria. The syndicate head was located in Lebanon (19).

The cells in Australia were headed by an Iranian national (suspect A) and an Iraqi-born Australian citizen (suspect B). The head of the syndicate coordinated the distribution of cash payments from drug trafficking networks operating in Australia to suspects A and B.

Suspect A operated a business in the Iranian community facilitating the immigration of Iranian nationals to Australia and other countries. Most of suspect A's financial activity involved large cash deposits (reported to AUSTRAC as threshold transactions reports, or TTRs) and regular incoming international funds transfer instructions (IFTIs) from companies in Canada, Iran, Slovenia, the UAE and Turkey.

TTRs received by AUSTRAC showed that, over a six-year period, suspect A received AUD715,000 in large cash deposits, while AUD63,000 cash was withdrawn from bank accounts associated with the suspect. Over that same period, the suspect and his company were the beneficiary of 41 incoming IFTIs totalling AUD521,000.

Suspect A was also the subject of two suspicious matter reports (SMRs) submitted by a bank. The SMRs described the various activities observed that gave it grounds for suspicion:

  • suspect A's unusual account activity
  • funds being sent to/received from high-risk jurisdictions
  • large cash deposits made at different bank branches on the same day
  • third parties making cash deposits into suspect A's account.

Over a one-year period suspect B was the ordering customer for 56 outgoing IFTIs totalling AUD244,000. Suspect B sent the funds to approximately 38 overseas-based beneficiary customers in 12 different countries, with the top five countries being the United States, Lebanon, China, Luxembourg and Syria. All but six IFTIs were conducted through remittance dealers. Over the one-year period suspect B conducted multiple 'same-day' IFTIs, on the majority of occasions conducting the transactions through different remitters.

Suspect B was also the subject of two SMR reports submitted by a bank, detailing the following activity:

  • Suspect B deposited cash into third-party bank accounts, with one beneficiary account holder identified to be an Iranian national without any work entitlements in Australia.
  • The suspect's trading account received regular large cash deposits, which were followed by cheque withdrawals issued to third parties.
  • Suspect B's mortgage account exhibited unusual transaction behaviour, being used for very large cash deposits and withdrawals (worth hundreds of thousands of dollars).
  • The suspect made many large cash deposits; behaviour which was inconsistent with the suspect's claimed occupation as a shop assistant.

Law enforcement also investigated the activities of a third suspect, suspect C, because of his involvement with a suspected money launderer. Authorities believe that suspect C arranged to transfer AUD300,000 to Mexico using the unregistered remittance service provided by suspect B. Suspect B was not registered with AUSTRAC as a remittance service provider.

Suspect C was arrested as he was departing Australia on a flight to Mexico. In his possession was USD9500, AUD660, two diamonds valued at AUD50,000 each and casino chips valued at AUD170,000.

A search of the AUSTRAC database showed that suspect C had a gambling turnover of AUD11 million over a three-month period. Suspect C was also the subject of four SMRs, which detailed his unusual gambling activity and practice of making cash deposits in amounts just below the AUD10,000 reporting threshold. The suspect conducted multiple, same-day gambling-related transactions on a regular basis. The gambling-related transactions were in close succession, which suggested the suspect was undertaking a bare minimum of gambling in between transactions.

The three suspects were arrested and charged with importing a commercial quantity of a border controlled drug contrary to the Criminal Code Act 1995. Suspect C was also charged with dealing in money or property valued in excess of AUD100,000, which is believed to be the proceeds of crime, contrary to section 400.4 of the Criminal Code Act.

Offence

  • Drug trafficking
  • Money laundering

Customer

  • Individual
  • Business

Industry

  • Banking (ADI)
  • Gambling services
  • Remittance services

Channel

  • Electronic
  • Physical

Report type

  • IFTI
  • SMR
  • TTR

Jurisdiction

International – primarily Canada, Iran, Lebanon, Mexico, Nigeria, Slovenia, Syria, Turkey, United Arab Emirates

Designated service

  • Account and deposit-taking services
  • Gambling services
  • Remittance services (money transfers)

Indicators

  • Cash deposits into third-party accounts
  • High-value transactions inconsistent with customer profile
  • High-value/volume gambling transactions with minimal gambling activity
  • International funds transfers to high-risk jurisdictions
  • Large cash deposits made at different bank branches on the same day
  • Multiple same-day gambling activity
  • Unusual transaction activity through business accounts, suggesting the account is being used for unregistered remittance activity

Case 17 – AUSTRAC information identified Australian victim of $2 million overseas investment scam

AUSTRAC information was instrumental in identifying an Australian victim who sent approximately AUD2 million to a highly organised international crime syndicate committing 'advance fee' fraud (20).

Using this information, authorities were able to identify the victim and discourage him from sending more money to the international crime group.

AUSTRAC analysis of international funds transfer instruction (IFTI) reports showed that over a seven-year period an Australian individual sent AUD1.2 million to multiple overseas beneficiaries in Ghana, Lebanon, Malaysia, Nigeria, Spain and the United Kingdom. The IFTIs ranged in amounts between AUD200 to AUD123,000 and were sent via various remittance services and banks.

AUSTRAC also identified several relevant suspicious matter reports (SMRs) in its database and disseminated these to Australian authorities. The SMRs showed:

  • The individual used cash to fund outgoing IFTIs to multiple beneficiaries in Egypt, Lebanon, Nigeria, Spain, Sri Lanka and the United Kingdom.
  • The IFTIs were for amounts ranging between AUD700 and AUD8,500.
  • The funds were transferred via remittance services.

Authorities analysed AUSTRAC financial intelligence and identified that the individual was a likely victim of fraud. They then contacted the victim to alert him that he was probably being scammed and warn him not to send any more money overseas.

Further investigation revealed that the victim communicated with the overseas fraudsters over the internet. The fraudsters invited the victim to send money to recover allegedly 'lost funds' and to establish investments in Australia.

The victim sent a total of AUD2 million to the fraudsters. The victim believed the funds were for various 'fees and taxes', which, once paid, would secure the release of GBP32 million worth of lost funds from the United Kingdom (21).

The victim stopped sending funds after authorities contacted him. This is an example of authorities using AUSTRAC information to investigate a highly organised scheme by international criminal groups to defraud Australian citizens.

Offence

Fraud

Customer

Individual

Industry

  • Banking (ADIs)
  • Remittance services

Channel

  • Electronic
  • Physical

Report type

  • IFTI
  • SMR

Jurisdiction

International – Egypt, Ghana, Lebanon, Malaysia, Nigeria, Spain, Sri Lanka, United Kingdom

Designated service

  • Account and deposit-taking services
  • Remittance services (money transfer)

Indicators

  • High volume of international funds transfers from Australia for no apparent logical reason
  • International funds transfers to a high-risk jurisdiction

Case 18 – Suspicious million dollar transfers undid major methamphetamine operation

Multiple law enforcement agencies worked together to dismantle a major drug syndicate operating in Australia and Vietnam. The investigation uncovered one of the most elaborate methamphetamine operations in Victoria's history and led to the arrest of eight suspects.

AUSTRAC information detailed international funds transfers undertaken by the syndicate.

Law enforcement targeted the drug syndicate after monitoring the financial activity and assets belonging to the suspects, most of whom were operating from Vietnam.

Analysis of AUSTRAC information by law enforcement showed that over a 12-month period, approximately AUD24 million was sent via international funds transfer instructions (IFTIs) to Vietnam. All IFTIs were paid for entirely with cash. The syndicate mainly used remittance dealers to send the outgoing IFTIs. Law enforcement also believed that the individuals sending the funds were using false driver licences and credit cards.

The syndicate was the subject of 53 suspicious matter reports (SMRs). The majority of these were submitted by the remittance providers facilitating the outgoing IFTIs to Vietnam. The grounds for suspicion mainly related to the large amounts of cash possessed by the network and the transfer of funds to common beneficiaries in Vietnam.

Banking institutions also submitted four SMRs related to the syndicate, with the nominated grounds for suspicion including suspicious cash activity undertaken by the syndicate members, including apparent 'structuring' of account deposits and withdrawals. The SMRs noted that some of the beneficiary customers in Vietnam shared the same address and the large amounts of cash sent by the syndicate were inconsistent with the stated occupations of many of its members.

Eight members of the syndicate were arrested and charged with trafficking a large commercial quantity of methamphetamine. They were remanded in custody.

Offence

Drug trafficking

Customer

Individual

Industry

  • Banking (ADIs)
  • Remittance services

Channel

  • Electronic
  • Physical

Report type

  • IFTI
  • SMR

Jurisdiction

International – Vietnam

Designated service

  • Account and deposit-taking services
  • Remittance services (money transfers)

Indicators

  • Financial activity does not match established customer profile
  • Large international funds transfers to common beneficiaries
  • Large amounts of cash to pay for international funds transfers
  • Multiple customers conducting international funds transfers to the same overseas beneficiary
  • Multiple international funds transfers to a high-risk jurisdiction
  • Multiple international funds transfers to beneficiaries with same address
  • Structuring of cash deposits and withdrawals over a period of time to avoid reporting requirements
  • Use of false identification to conduct transactions

Case 19 – Director of remittance business jailed for laundering cash for criminals

AUSTRAC provided financial intelligence to assist law enforcement with their investigation into a remitter suspected of laundering illicit funds for crime syndicates.

AUSTRAC analysis identified additional entities, bank accounts and telephone numbers associated with the remitter. The remittance company director was charged and pleaded guilty to dealing with money reasonably suspected to be the proceeds of crime. He was sentenced to three months imprisonment and given an 18-month good behaviour bond.

Law enforcement commenced an investigation into a remittance company and its directors who were suspected of laundering illicit funds for criminal syndicates and individuals. The company also operated as a legitimate remitter sending funds primarily to individuals in Iran and Iraq.

Through its regular financial transaction reporting to AUSTRAC, the remittance company reported sending AUD6 million to Iran and Iraq on behalf of its legitimate customers. However, according to transaction data submitted by banks which dealt with the remittance business as a customer, the remitter sent AUD3.66 million to overseas beneficiaries over the same period. This resulted in a AUD2.34 million shortfall between the amount of money the remitter company claimed to have sent overseas and the amount the company actually remitted. The bank transaction data also showed that the remitter made significant cash deposits (cash deposits of AUD10,000 or more) totalling AUD3.14 million.

Along with the company director, a number of other individuals also played a key role in the company, including an associate and his son.

The company director was charged and pleaded guilty to dealing with money reasonably suspected to be the proceeds of crime contrary to section 400.9(1) of the Criminal Code Act 1995. He was sentenced to three months imprisonment and given an 18-month good behaviour bond. He also received a forfeiture order under section 48 of the Proceeds of Crime Act 2002 allowing for the seizure of AUD225,000 The other two men were not charged.

Offence

Money laundering

Customer

  • Individual
  • Business

Industry

Remittance services

Channel

Electronic

Report type

IFTI

Jurisdiction

International – Iran, Iraq

Designated service

Remittance services (money transfers)

Indicators

  • International funds transfers to high-risk jurisdiction
  • Large cash deposits used to pay for IFTIs
  • Third-party cash deposits

Case 20 – Suspect used casinos, remitters and airline pilots to launder proceeds of crime

A law enforcement agency conducted an investigation into a suspect believed to be part of an international money laundering scheme. AUSTRAC information revealed the syndicate's financial activities and assisted authorities to identify the suspect.

The suspect was charged with dealing with property reasonably suspected of being the proceeds of crime and received a 12-month good behaviour bond.

Authorities alleged that the suspect was part of a scheme to launder approximately AUD2.4 million from the proceeds of crime. AUSTRAC information provided an insight into the financial activities of the syndicate and assisted in identifying the suspect.

The investigation was initiated following the identification of three Chinese airline crew who attempted to depart Australia while carrying a total of more than AUD100,000 of undeclared currency (22). Authorities identified that two of the airline crew were found to be carrying both Australian and foreign currency equivalent to more than AUD40,000 and AUD30,000 respectively. The third crew member was in possession of foreign currency equivalent to more than AUD30,000.

Following the identification of the three crew members, law enforcement authorities obtained information that prompted them to begin investigating a number of Australian-based individuals, believed to be part of the international money laundering scheme.

Suspicious casino gambling activity

Law enforcement officers began investigating the suspect after AUSTRAC received a suspicious matter report (SMR) concerning the suspect's activities. The SMRs highlighted inconsistent gaming activity at a casino by the suspect. One SMR described how the suspect had lost more than AUD3 million in one year while gambling in the casino. The suspect's losses in other years were comparatively smaller, ranging from approximately AUD3,000 to AUD30,000.

During further investigations, authorities observed the suspect take possession of a bag. Authorities intercepted the suspect and found approximately AUD200,000 cash inside the bag. Law enforcement officers seized the cash and the suspect was arrested.

Law enforcement officers subsequently established that the suspect had previously given the three airline crew large amounts of cash for them to 'courier' from Australia to China as part of the money laundering scheme (23).

Suspicious transfers to China and huge cash deposits

Authorities established that the suspect was a known associate of an individual employed by a remittance service provider. On several occasions the individual received a commission for transferring a significant amount of funds to China on behalf of the suspect. Authorities suspected that the individual used false names and altered records to the international funds transfers.

An Australian bank submitted an SMR about this individual's activities after she made two unusually large cash deposits totalling AUD600,000 on the same day to the same bank account. AUSTRAC also received two significant cash transaction reports (SCTRs) for the two large deposits. Authorities also alleged that the individual deposited a further AUD800,000 on a different day.

The suspect was charged under the Criminal Code Act 1995 with dealing with property reasonably suspected of being proceeds of crime. The suspect received a 12-month good behaviour bond.

Offence
  • Money laundering
  • Undeclared currency

Customer

  • Individual
  • Business

Industry

  • Remittance services
  • Banking (ADIs)
  • Gambling services

Channel

  • Physical
  • Electronic
  • Agent/third party

Report type

  • SMR
  • IFTI
  • SCTR

Jurisdiction

International – China

Designated service

  • Remittance services (money transfers)
  • Account and deposit-taking services
  • Gambling services

Indicators

  • Multiple cash deposits on the same day into the same bank account
  • Multiple high-value international funds transfers
  • Sudden large increase in gambling activity inconsistent with customer's established gambling profile
  • Third-party individuals making large cash deposits into accounts
  • Use of cash couriers
  • Use of third parties to deposit funds

Footnotes

  1. See the Glossary for a definition of 'hawala'
  2. See the Glossary for a definition of 'advance fee fraud'.
  3. GBP (Great Britain Pounds).
  4. Under the AML/CTF Act, when a person carries currency of AUD10,000 or more (or foreign currency equivalent) into or out of Australia, a cross-border movement of physical currency (CBM-PC) report must be completed upon entry into Australia or prior to leaving Australia. It is an offence not to declare currency above the threshold of AUD10,000 (or foreign currency equivalent).
  5. See the Glossary for a definition of 'cash couriers'.
Last modified: 11/02/2015 11:21