Summary
An investigation identified an Australian syndicate illegally importing tobacco and cigarettes, with help from freight forwarding services and transport services companies. AUSTRAC’s financial analysis identified the syndicate’s purchase of tobacco and cigarettes from the United Arab Emirates (UAE) and Indonesia. Six offenders were charged and convicted.
What to look out for
- Multiple international funds transfer instructions (IFTIs) over A$20,000 sent to South East Asia or the Middle East.
- Multiple customers sending international funds transfer instructions (IFTIs) to the same beneficiary customer.
- A domestic company remitting funds to an overseas company in a different and unrelated industry, such as a hairdressing business remitting funds to an overseas tobacco supplier.
- The reason for the transfer stated on the IFTI not fitting the description of the company receiving the remittance, such as an IFTI sent to a tobacco supply company for ‘building supplies’.
- Large cash deposits followed by IFTIs sent to tobacco supply companies.
- Large cash deposits into a personal account inconsistent with the customer’s profile.
- Customer is reluctant to explain large cash deposits made into a personal account.
The crime
An investigation identified an Australian syndicate illegally importing tobacco and cigarettes from the UAE, Indonesia, Singapore and Malaysia. Using personal and business accounts, the syndicate remitted funds via international funds transfer instructions (IFTIs) to companies in the UAE and Indonesia. Many of the IFTIs were funded by large cash deposits made by syndicate members.
Within Australia, the syndicate made cash payments to freight forwarding services and transport services companies that facilitated the illegal importation. The investigation identified two Victorian shops and one New South Wales entity that syndicate members were using to sell the tobacco and cigarettes.
After searching residential and business properties belonging to syndicate members, police seized nine homes, a luxury boat, A$224,000 in cash, 72 tonnes of tobacco and 64 million cigarettes. Sale of the illicit tobacco and cigarettes would otherwise have earned the syndicate up to A$45 million in profit.
Syndicate members and associates were arrested and charged.
Penalties
Six offenders were charged with possessing and importing tobacco products with intent to defraud the Commonwealth. They were convicted and received sentences of up to six years and two months.
How business reporting helped
Suspicious matter reports (SMRs) submitted by banks revealed the syndicate’s transaction activity. In particular, these SMRs highlighted large and unusual cash deposits, some of which were used to fund IFTIs, as well as suspicious IFTIs sent to tobacco companies in the UAE.
AUSTRAC’s role
AUSTRAC provided financial analysis of syndicate members and their associates. Our analysis of IFTIs and threshold transaction reports (TTRs) identified the transactions used to purchase tobacco and cigarettes from the UAE and Indonesia. The analysis also uncovered the syndicate’s association with the complicit freight forwarding company.
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