FOREIGN criminal syndicates including major drug traffickers were able to launder millions of dollars through Australia after the Commonwealth Bank allegedly failed to comply with strict money laundering and counter terrorism financing laws and monitor almost 780,000 accounts.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) filed a motion in the Federal Court to prosecute the bank alleging 53,700 contraventions of the AML/CTF laws since 2012.
According to the lodged statement, part of the contravening of the laws stemmed from CommBank’s rollout of Intelligent Deposit Machines (IDMs), similar to ATMs but that accept cash and cheque deposits.
The machines have been so popular that by June last year $1 billion a month was being deposited this way.
But according to AUSTRAC, the machines were being targeted by money laundering syndicates and criminal gangs wanting to move proceeds of their drug manufacturing and trafficking sales offshore and domestically.
It is understood these gangs include known criminal figures linked to Outlaw Motorcycle groups.
In one case, between November 2014 and August 2015 cash deposits totalling $27.2 million were made to one account and almost immediately transferred offshore.
“The deposits were the proceeds of a drug manufacture and importation syndicate,” the filed motion states.
“Three individuals have been charged with dealing with proceeds of crime, with one of these individuals already having been convicted.”
In another case, CommBank had allegedly identified repeated suspected structured cash deposits to 16 of its accounts, 15 of them carrying fake names, moving cash to China.
“Notwithstanding this suspicion, between April and 1 July 1 2015, CommBank permitted approximately $9.1 million to be transferred from these accounts to Hong Kong.”
The Australian Federal Police later established the bank accounts were opened by foreign nationals on holiday visas for the sole purpose of making bulk cash deposits here to launder tens of millions of dollars back overseas.
The CommBank had identified suspicious transactions by a third criminal syndicate but again, according to AUSTRAC’s court statement, allowed them to continue trading until police arrested each person.
Almost 100 other CommBank accounts were used for “cuckoo smurfing” where transfers of money can be made between associated in separate countries in a way that monies don’t need to cross borders. And in another case, the bank failed to report suspicions one of its customers was running an illegal money remittance service.
The blatant abuse of IDMs has continued as late as January this year with CommBank accepting $320,000 cash deposits over five days into the one account.
Peter Clark, the acting head of the financial intelligence and regulatory agency, said for a period of three years, CommBank did not comply with the requirements of its AML/CTF program relating to monitoring transactions on 778,370 accounts.
“AUSTRAC alleges that the bank failed to report suspicious matters either on time or at all involving transactions totalling over $77 million,” me said.
“Even after CBA became aware of suspected money laundering or structuring on CBA accounts, it did not monitor its customers to mitigate and manage … risk.”
Mr Clark said that today’s action should send a clear message to all reporting entities about the importance of meeting their obligations.
In a statement, CommBank acknowledged civil proceedings had been brought by AUSTRAC.
“We have been in discussions with AUSTRAC for an extended period and have co-operated fully with their requests,” it said.
“We take our regulatory obligations extremely seriously and we are one of the largest reporters to AUSTRAC. On an annual basis we report over four million transactions to AUSTRAC in an effort to identify and combat any suspicious activity as quickly and efficiently as we can.”