Growing Concerns over Money Laundering Schemes in Australia


PUBLISHED: October 1, 2022
Growing Concerns over Money Laundering Schemes in Australia

The Australian Federal Police has cracked down on numerous cases in recent months that unveiled money laundering schemes in Australia. Over $10 million dollars in assets, including cryptocurrencies, have been seized—with one case as recent as July, where a storage unit in Canberra was revealed to hold over $1.5 million in cash.

Another man, also based in the Australian Capital Territory, was arrested on suspicions of real estate forgery but was granted bail. According to the AFP, the suspect was alleged to have dealings in cryptocurrency and identity theft, as well as proceeds from scams and other illegal activities.

The Criminal Assets Confiscation Taskforce (CACT) has worked tirelessly alongside criminal investigations regarding the rampant money laundering industry in Australia, with Operation Nairana being initiated in 2020. The FBI and U.S. Internal Revenue Service (IRS) notified the Australian government that cryptocurrency was being used to launder money by someone from within the country.

Trading crypto futures and other crypto-related trade is still largely unregulated and considerably legal in the country, but AUSTRAC, Australia’s financial security agency, is throwing their weight behind the ongoing investigations and providing relevant financial data in order to assist authorities and investigators in closing the case and any loopholes that criminals are able to exploit.

AUSTRAC provided support to the initial stages of this investigation, identifying relevant financial data. The Australian Criminal Intelligence Commission has also significantly supported this investigation and will continue using intelligence capabilities to assist partners.

FBI Legal Attaché Nitiana Mann said during an interview that their collaboration will “continue to exemplify our commitment to protect the integrity of our financial systems,” and Chief Jim Lee of the IRS Criminal Investigation team and J5 was also quoted as saying that “the days of cryptocurrency being used to anonymously move money for illicit activities are over.”

J5, formed in 2018, is a global task force bent on eradicating crime. Made up of the tax enforcement authorities from countries such as Australia, Canada, the Netherlands, the UK and the US, “the J5 exists for cases just like this where international partnerships can bring successful investigative outcomes, preventing our jurisdictions from being used as havens for criminal activity,” as explained by Chief Jim Lee.

When it comes to the digital space, creative measures need to be taken, especially when faced with blockchain technology. As the legitimacy of cryptocurrency rises, abuse is rising along with it.

Michael Tink, the national manager of intelligence operations at AUSTRAC gives an example of how cryptocurrency can be used to manage money laundering operations.

“Where a crime group might have previously been sending money offshore using the banking sector or a remittance dealer, in some cases—not a lot—we might see them trying to deposit criminal proceeds through a digital currency exchange provider and send money to a counterpart offshore using cryptocurrency itself.”

At the moment, only a small portion of money launderers go through cryptocurrency as it’s still an up-and-coming method, but authorities need to clamp down on regulations before things get out of hand, much like the real estate sector that is also a victim of money laundering.

A sore topic for Australia’s real estate industry is how corrupt cash is seeping in through the corners. The lack of a register seems to be a means for money laundering opportunities.

Michael Sainsbury reported that “the entire Barangaroo project appears designed to enable money to be shifted around anonymously,” and true enough, the headlines of Barangaroo’s invitation to launder dirty money has been thrown around in the press since the opening of Sydney’s new A$2 billion casino.

Without a beneficial ownership register, ownership of the units in Barangaroo tower can be kept secret. Nobody would know who owns those units, plus they are highly private, with elevators that go directly to the gambling floor. With zero visibility on ownership, anyone can launder their money at the casino, as it’s no secret that casinos are known to turn a blind eye to their patron’s background as long as they keep patronizing their establishment.

There are accusations that the Australian government is not taking the necessary steps in order to shut out illicit activities within their borders because it’s part and parcel of their economy, but where criminal activity goes, criminals will follow, and it will become a matter of public security.

The cabinet is currently pushing for Assistant Treasurer, Stephen Jones, to establish a beneficial ownership register and J5 will continue to keep an eye on what goes on in the digital space. Although it won’t be long until the government discovers that they will also need to start policing online transactions, especially in the crypto landscape where anonymity runs rampant and it is becoming increasingly difficult to track down illicit behavior.

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