Summary
AUSTRAC discovered two companies providing remittance services while unregistered. After a request to comply, their applications showed multiple breaches of their obligations and AUSTRAC referred them for criminal investigation. Along with suspicious matter reports (SMRs), AUSTRAC’s financial intelligence helped law enforcement expose money laundering and convict two offenders.
What to look out for
- Multiple regular large cash deposits greater than A$10,000 into a remittance business bank account on the same day at the same branch by an entity related to the remittance business.
- Multiple cash deposits into a remittance business bank account resembling attempts at structuring for amounts below the A$10,000 reporting threshold.
- Regular cash deposits by operators or entities linked to a remittance business into their personal and third-party bank accounts, followed by outgoing international funds transfer instructions.
- Transaction activities linked via the same address, owners, and/or account signatories.
- Remittance business activities not being recorded on the remittance sector register.
The crime
AUSTRAC identified two companies, operated by a couple, providing remittance services while unregistered. After informing them of their registration obligations, AUSTRAC received their applications to register. The applications were denied due to:
- false declarations
- failing to have a compliant AML/CTF program in place
- failing to advise AUSTRAC about the conviction of one key person and get a National Police Certificate for another person
- late and incorrect IFTI reports.
AUSTRAC then referred the companies and their directors to law enforcement who executed a search warrant and found A$1.45 million in cash.
Penalties
The two offenders were convicted of operating an unregistered remittance service and money laundering, and received suspended sentences between 24 to 26 months each. They forfeited over A$2 million as the proceeds of crime.
How business reporting helped
Suspicious matter reports from reporting entities showed multiple very large suspicious cash deposits and withdrawals for the offenders’ business and personal accounts, some including counterfeit notes, and with evidence of structuring to avoid transaction reporting.
AUSTRAC’s role
AUSTRAC referred the companies and their directors for criminal investigation and provided key financial intelligence to law enforcement. Our financial intelligence included the total value and volume of threshold transaction reports and IFTI reports and showed:
- the discrepancy between the value of IFTIs remitted and the value of IFTIs reported to us
- the remitters lodged no SMRs against any of their customers despite the high volume of transactions and value of the transfers
- large cash deposits to personal and third-party bank accounts were used to fund IFTIs
- the same signatories linked to both companies were transferring to a common beneficiary bank overseas.
This guidance sets out how we interpret the Act, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.
The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.
This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.