Suspicious matter reports assisted law enforcement with an investigation into a sophisticated drug importation criminal syndicate. AUSTRAC information also assisted authorities to identify the scale of the syndicate's financial activity.
A member of the syndicate was charged with attempting to import a marketable quantity of border-controlled drugs and precursors. He was sentenced to a maximum of six years and eight months imprisonment.
Law enforcement authorities disrupted a complex and sophisticated Adelaide-based criminal syndicate, which used stuffed toys, cushions and nappies to import large quantities of pseudoephedrine and methamphetamine into Australia. Authorities estimated that the drugs had a street value of AUD6.6 million.
The investigation was initiated after law enforcement officers examined cargo imported into Australia from Hong Kong and found approximately 126 grams of crystal methamphetamine hidden within a stuffed toy and concealed among other clothing.
Over a 13-day period authorities identified further drugs imported into Australia including approximately 535 grams of crystal methamphetamine concealed in stuffed toys and the lining of nappies and approximately 7 kilograms of pseudoephedrine concealed in cushions. The investigation led to the arrest of suspect A, who allegedly directed the importation of drugs.
Law enforcement authorities allege that in addition to importing multiple packages to various locations in Adelaide, the criminal syndicate also made multiple international funds transfers to China to fund the importation of drugs. AUSTRAC data showed that over a one-year period, syndicate members sent international funds transfer instructions (IFTIs) totalling more than AUD137,000 to China.
The AUSTRAC database revealed two suspicious matter reports (SMRs) involving a syndicate member.
- A reporting entity submitted an SMR following observations that, in one month, syndicate member #1 sent 15 IFTIs totalling more than AUD67,000 to China. The reporting entity formed its suspicions on the basis that:
- all of the outgoing IFTIs were paid for with cash, in structured amounts below the AUD10,000 cash reporting transaction threshold
- the IFTIs were sent to multiple beneficiary customers in a high-risk jurisdiction
- the volume and frequency of the funds transfers undertaken by the syndicate member was higher than normal for an average customer.
- Another reporting entity submitted an SMR detailing how another customer, syndicate member #2, attended a branch to deposit cash and conduct two IFTIs totalling AUD33,000 to China. The SMR noted that the funds were sent to the same China-based beneficiary that an apparently unrelated customer had sent IFTIs to the previous day. Further investigation revealed that this 'unrelated customer' was syndicate member #1 referred to above.
The bank identified that syndicate member #1 had attended the branch the day before and deposited AUD9,000 cash, in amounts of AUD1,000 and AUD8,000. The syndicate member then withdrew AUD8,000 and undertook an IFTI for AUD8,000 to the common beneficiary customer in China.
The reporting entity contacted syndicate member #1 about these transactions. He was guarded and evasive when asked about the reason for the transfer of funds to China, and his relationship to syndicate member #2 (who had sent AUD33,000 to the same individual in China the next day).
The bank determined that it was unusual that a total of AUD41,000 had been transferred to the same beneficiary in China over two consecutive days by two different customers. This, combined with syndicate member #1's reluctance to explain or provide further details about the transaction and the bank's inability to determine the purpose of the funds transfers, prompted the bank to submit an SMR to AUSTRAC.
The AUSTRAC database also showed that suspect A had sent 11 IFTIs to China totalling more than AUD37,000.
AUSTRAC information also assisted authorities to identify the scale of the activity. Since January 2008, syndicate members were linked to approximately 400 outgoing IFTIs to China totalling approximately AUD3 million and 40 outgoing IFTIs to Hong Kong totalling approximately AUD400,000.
Law enforcement authorities executed search warrants at two residential premises. Various items were seized including more than AUD14,000 cash, SIM cards, computers, documents, fake Chinese and Australian identification, stuffed toys with their contents removed, drugs paraphernalia including scales and 'deal' bags, and containers containing residual trace elements of methamphetamines.
Suspect A was charged with importing and attempting to import a marketable quantity of border-controlled drugs and precursors. He was sentenced to a maximum of six years and eight months imprisonment.
|Jurisdiction||International – China, Hong Kong|