Case study summary
A referral from AUSTRAC assisted a joint law enforcement investigation targeting registered sex offenders travelling offshore to commit offences against children. While assisting the investigation, AUSTRAC identified two additional suspects in Australia who were sending funds to common beneficiaries in the Philippines to facilitate the sexual exploitation of children. As a result both suspects were arrested and charged with child offences. They received sentences ranging from seven-and-a-half years to eleven-and-a-half years imprisonment.
The use of online remittance services to transfer funds to South East Asian countries is consistent with methods used previously by Australian suspected of child exploitation.
The following possible indicators may help identify this criminal activity:
- Frequent, low-value remittance to South East Asian countries where the remittance is valued between AUD10-AUD100; particularly, where these transactions are conducted through online remittance services
- Frequent, low-value outgoing remittance to a common beneficiary in South East Asia sent by multiple Australia-based customers.
A law enforcement operation uncovered pay-per-view child pornography websites and chat rooms which allowed suspects in Australia to view the abuse of children. These sites are most commonly hosted in the Philippines and facilitate child exploitation for a fee.
Search warrants were executed on suspect A’s property and laptop computers and external storage devices were seized, with preliminary forensic examination uncovering child sex exploitation material.
Financial transaction reporting by four reporting entities assisted with 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.
Two financial intelligence assessments were prepared and used by law enforcement authorities to support the investigation against suspect A. Analysis of financial transactions conducted by suspect A identified the following:
- Over a three-year period the suspect sent more than 400 outgoing IFTIs to beneficiaries in the Philippines and the United States of America (USA), totalling approximately AUD39,000.
- All outgoing IFTIs were sent through remittance services, with the majority of transfers conducted through online remittance systems.
- Outgoing IFTIs were conducted in amounts between AUD10 and AUD1000. About half of the outgoing IFTIs were for amounts of between AUD10 and AUD100.
- AUSTRAC received six SMRs relating to outgoing IFTIs sent by the suspect through remittance services. The SMRs identified that the suspect undertook a high number of funds transfers to a high-risk jurisdiction (i.e. the Philippines).
Suspect B paid organisers in the Philippines to view via webcam the abuse of young Filipina girls. An AUSTRAC financial intelligence assessment was used by law enforcement authorities to support the investigation against suspect B.
AUSTRAC analysis of financial transactions conducted by suspect B showed:
- Over a four-year period, suspect B conducted approximately 140 outgoing IFTIs to beneficiaries in the Philippines and Thailand, totalling more than AUD22,000.
- For the first two years, suspect B sent funds to beneficiaries in Thailand only. In 2010 the suspect started also transferring funds to the Philippines.
- Suspect B also began using online remittance services when he started transferring funds to the Philippines.
The use of online remittance services to transfer funds to South East Asian countries is consistent with the methods used previously by Australian suspects paying to view child exploitation online. Law enforcement believes that the speed and ease of online payments facilitates ongoing offending.
The two suspects were arrested and charged with child offences under the Criminal Code Act 1995 (Cth) and the Crimes Act 1958 (Vic.). Suspect B was convicted and sentenced to a maximum jail term of seven years and six months and ordered to undergo extensive sex offender therapy treatment while in custody. Suspect A was convicted and sentenced to11 years and six months.
International – United States of America, Philippines, Thailand
|Designated service||Remittance service (money transfer)|