Summary
A referral from AUSTRAC helped a law enforcement investigation targeting registered sex offenders travelling overseas to commit offences against children. AUSTRAC identified two additional offenders in Australia who were sending funds to common beneficiaries in the Philippines. Both offenders were arrested and jailed.
What to look out for
- Frequent, low-value remittances, particularly through online remittance services, to South-East Asian countries valued between A$10 and A$100.
- Frequent, low-value outgoing remittances to a common beneficiary in South-East Asia sent by multiple Australia-based customers.
The crime
A law enforcement operation uncovered pay-per-view child pornography websites and chat rooms that allowed offenders in Australia to view the abuse of children for a fee.
AUSTRAC prepared financial intelligence reports about two offenders (A and B), linking them to multiple funds transfers to the Philippines.
Authorities seized laptop computers and external storage devices from Offender A’s property and forensic examination found child sex exploitation material. The investigation also found that Offender B paid organisers in the Philippines so he could view the abuse of young Filipina girls via webcam.
The two offenders were arrested and charged.
Penalties
Offender A was convicted and sentenced to 11 years and six months in prison. Offender B was convicted and sentenced to seven years and six months and ordered to undergo extensive sex offender therapy treatment while in custody.
How industry reporting helped
Financial transaction reporting by four reporting entities helped the investigation. AUSTRAC received international funds transfer instructions (IFTIs) from a bank and three major remitters.
AUSTRAC also received six suspicious matter reports (SMRs) from two of the major remitters. The SMRs identified that Offender A undertook a high number of funds transfers to a high-risk jurisdiction (the Philippines).
Using online remittance services to transfer funds to South-East Asian countries is consistent with the methods Australian offenders have previously used to view child exploitation online. This offending is most commonly facilitated from the Philippines. Law enforcement believe the speed and ease of online payments facilitates ongoing offending.
AUSTRAC’s role
AUSTRAC prepared two financial intelligence assessments to support the investigation against Offender A. Our analysis identified that:
- over three years the offender sent more than 400 outgoing IFTIs to beneficiaries in the Philippines and the US totalling approximately A$39,000
- all outgoing IFTIs were sent through remittance services with most of the transfers made through online remittance systems
- outgoing IFTIs were for amounts between A$10 and A$1000 (about half were between A$10 and A$100).
An AUSTRAC financial intelligence assessment also supported the investigation against Offender B. Our analysis showed that:
- over four years Offender B made approximately 140 outgoing IFTIs to beneficiaries in the Philippines and Thailand totalling more than A$22,000
- for the first two years Offender B sent funds to beneficiaries in Thailand only, then started transferring funds to the Philippines as well
- Offender B also began using online remittance services when he started transferring funds to the Philippines.
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.