Summary
A referral from AUSTRAC helped a law enforcement investigation targeting registered sex offenders travelling overseas to commit offences against children. AUSTRAC identified two additional offenders in Australia who were sending funds to common beneficiaries in the Philippines. Both offenders were arrested and jailed.
What to look out for
- Frequent, low-value remittances, particularly through online remittance services, to South-East Asian countries valued between A$10 and A$100.
- Frequent, low-value outgoing remittances to a common beneficiary in South-East Asia sent by multiple Australia-based customers.
The crime
A law enforcement operation uncovered pay-per-view child pornography websites and chat rooms that allowed offenders in Australia to view the abuse of children for a fee.
AUSTRAC prepared financial intelligence reports about two offenders (A and B), linking them to multiple funds transfers to the Philippines.
Authorities seized laptop computers and external storage devices from Offender A’s property and forensic examination found child sex exploitation material. The investigation also found that Offender B paid organisers in the Philippines so he could view the abuse of young Filipina girls via webcam.
The two offenders were arrested and charged.
Penalties
Offender A was convicted and sentenced to 11 years and six months in prison. Offender B was convicted and sentenced to seven years and six months and ordered to undergo extensive sex offender therapy treatment while in custody.
How industry reporting helped
Financial transaction reporting by four reporting entities helped 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. The SMRs identified that Offender A undertook a high number of funds transfers to a high-risk jurisdiction (the Philippines).
Using online remittance services to transfer funds to South-East Asian countries is consistent with the methods Australian offenders have previously used to view child exploitation online. This offending is most commonly facilitated from the Philippines. Law enforcement believe the speed and ease of online payments facilitates ongoing offending.
AUSTRAC’s role
AUSTRAC prepared two financial intelligence assessments to support the investigation against Offender A. Our analysis identified that:
- over three years the offender sent more than 400 outgoing IFTIs to beneficiaries in the Philippines and the US totalling approximately A$39,000
- all outgoing IFTIs were sent through remittance services with most of the transfers made through online remittance systems
- outgoing IFTIs were for amounts between A$10 and A$1000 (about half were between A$10 and A$100).
An AUSTRAC financial intelligence assessment also supported the investigation against Offender B. Our analysis showed that:
- over four years Offender B made approximately 140 outgoing IFTIs to beneficiaries in the Philippines and Thailand totalling more than A$22,000
- for the first two years Offender B sent funds to beneficiaries in Thailand only, then started transferring funds to the Philippines as well
- Offender B also began using online remittance services when he started transferring funds to the Philippines.
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