Skip to main content

Global crime syndicate used underground banking to launder drug profits


AUSTRAC assisted an investigation into an international syndicate suspected of importing drugs and using underground banking systems to launder the profits. Information from reporting entities enabled us to monitor the movement of large, unexplained sums of cash. Three offenders were arrested and charged with importing commercial quantities of narcotics. One offender was also charged with dealing in crime proceeds.

The crime

The joint investigation found the head of a Lebanon-based international crime syndicate used hawala informal money transfer systems to distribute drug trafficking profits to two syndicate members (offenders A and B) living in Australia.

Offender A, an Iranian national living in Australia, received over A$1 million in cash and international funds transfers over six years. The offender also sent funds to high-risk jurisdictions.

Offender B, an Australian citizen, sent transfers totalling A$244,000 to 12 countries through remittance service providers over a year. The offender also made large cash deposits to third-party bank accounts. 

Authorities also investigated a third offender, Offender C, as they believed he arranged to use a remittance service provided by Offender B to transfer A$300,000 to Mexico. Offender C was arrested before flying to Mexico and was found to be carrying cash, diamonds and casino chips worth over A$280,000.

All three offenders were arrested and charged with importing a commercial quantity of a border-controlled drug. Offender C was also charged with dealing in crime proceeds.

How business reporting helped

Threshold transaction reports (TTRs) alerted AUSTRAC to multiple large cash deposits and regular incoming international funds transfer instructions (IFTIs) from overseas companies.

Two suspicious matter reports (SMRs) from a bank described unusual account activity by Offender A, including:

  • funds sent to and received from high-risk jurisdictions
  • large cash deposits made at different branches on the same day
  • third-party cash deposits into Offender A’s account.

Another two SMRs from a bank detailed Offender B’s suspicious account activity:

  • deposits to third-party bank accounts, including to one account holder who was an Iranian national with no work entitlements in Australia
  • large cash deposits followed by cheques issued to third parties
  • unusual mortgage account activity, such as cash deposits and withdrawals worth hundreds of thousands of dollars
  • large cash deposits inconsistent with the offender claiming he worked as a shop assistant.

Offender C was also the subject of four SMRs. These detailed unusual gambling activity and regular cash deposits just below the reporting threshold of A$10,000.

AUSTRAC’s role

AUSTRAC analysed the reports received from the banks and provided authorities with financial intelligence that helped lead to the arrest of the offenders.

The content on this website is general and is not legal advice. Before you make a decision or take a particular action based on the content on this website, you should check its accuracy, completeness, currency and relevance for your purposes. You may wish to seek independent professional advice.

Last updated: 14 Aug 2019
Page ID: 109

Was this page helpful?

Was this page helpful?
Please note that feedback you provide here will be used only for the purpose of improving our website. If you have a specific question about your AML/CTF obligations, please contact us.