AUSTRAC supported a law enforcement investigation into a drug trafficking syndicate that were suspected of having long-term involvement in the supply and distribution of narcotics in Australia.
AUSTRAC's analysis of transaction reports submitted by industry partners provided authorities with a snapshot of financial activities and identified additional persons linked to the syndicate for potential targeting by law enforcement.
The main suspect and two associates were arrested during a drug deal in which two kilograms of methamphetamine and AUD320,000 in cash was seized.
This investigation resulted in members of the syndicate being charged with:
- attempted trafficking of a controlled drug;
- dealing in the proceeds of crime
- possessing a controlled drug
The main suspect was subsequently sentenced to 11 years imprisonment.
The following indicators may help identify similar criminal activity:
- Australia-based ordering customers sending small, regular IFTIs of less than AUD7,000 each to common overseas beneficiaries (as well as beneficiaries with variations of the same names). In this case, IFTI beneficiaries were based in the United Kingdom and Indonesia
- Structuring of cash deposits below the AUD 10,000 threshold transaction limit
- Deposits are followed by multiple withdrawals or domestic funds transfers to accounts belonging to different individuals
- Customer operating multiple accounts with one financial institution and receiving multiple deposits within a short time frame
- Customer's account deposit activity is not in line with the customer's profile.
A joint Australian law enforcement investigation was initiated into a syndicate suspected of attempting to import a commercial quantity of cocaine from the United Kingdom to Australia. After failing to organise the cocaine importation into Australia, the suspects subsequently made arrangements to source a large quantity of methamphetamine from Indonesia to be on-sold in Australia.
Intelligence suggested the syndicate comprised of family members and associates who authorities suspected had a long-term involvement in the supply and distribution of narcotics.
Monitoring of the syndicate's funds flows and their physical movements resulted in investigators observing the primary suspect and two of his associates engaging in an attempted drug deal in a carpark, at which point all three individuals were arrested. A search of the individuals and their vehicles at the scene resulted in two one-kilogram bags of methamphetamine being located, as well as $320,000 in AUD50 and AUD100 notes.
Further search warrants were then executed at two residential properties linked to the investigation, where investigators seized documents and electronic devices.
Two of the syndicate members were the subject of four SMRs in relation to potential structuring of cash deposits into their bank accounts to avoid reporting requirements.
These SMRs and other TTRs reported by AUSTRAC's industry partners assisted in developing an understanding of the financial activity of the syndicate over a three year period. This activity included the following:
- Two associates of the primary suspect were the subject of six threshold transaction reports (TTRs) after withdrawing more than AUD66,000 cash and deposits totalling AUD12,000.
- The primary syndicate members were linked to a number of significant cash deposits totalling AUD92,350 and subsequent withdrawals of AUD82,600, but in most instances, these transactions were conducted by their associates.
AUSTRAC information and analysis supported the investigation from inception to resolution/arrest.
AUSTRAC identified that family members of the syndicate had had no recorded activity for several years, suggesting the possible use of cash transactions that are not reportable to AUSTRAC and/or that associates may be transacting on behalf of family members.
The primary suspect and a number of associates also had interests in a number of registered companies on the Australian Securities and Investments Commission (ASIC) database. These companies had minimal recorded financial activity, suggesting any actual transaction activities may have been conducted outside reporting requirements (for example, structuring of cash transactions below AUD10,000 or transacting in cheques).
Further AUSTRAC's analysis identified:
- Cash deposits into the personal bank accounts of the primary suspect's associates ranged between AUD9,000 and AUD9,900, which were subsequently withdrawn or domestically transferred to other bank accounts, consistent with structuring and/or the domestic layering of funds.
- Analysis of the suspects' accounts revealed regular low-value IFTIs sent to the United Kingdom, a potential source country for the intended cocaine importation.
- Analysis of the associates' IFTI transactions revealed multiple IFTIs sent to a common beneficiary with multiple variations of a single name.
- The associates' IFTI transactions also identified the purchase of property in Indonesia, a potential source country for methamphetamine imports.
The primary suspect and two of his associates were arrested by law enforcement and were charged with the following offences;
- attempted trafficking of a commercial quantity of controlled drugs contrary to section 11.1 and 302.2(1) and s 11.1(1) of the Criminal Code Act 1995
- dealing in proceeds of crime more than AUD100,000 contrary to section 400.4(2) of the Criminal Code Act 1995
The primary suspect was charged with an additional offence of possessing a controlled drug contrary to section 308.1(1) of the Criminal Code Act 1995.
He was sentenced to a total of 11 years imprisonment, which included;
- 6 years and 6 months for trafficking.
- 5 years and 6 months for possession and dealing in proceeds of crime.
Case study summary
International – United Kingdom, Indonesia
Account and deposit-taking services
Remittance services (money transfer)