Summary
A suspicious matter report (SMR) submitted to AUSTRAC was key to dismantling an international drug syndicate operating in Australia. Authorities used this information to identify people and financial transactions of interest and to establish links between syndicate members. Two offenders were convicted.
What to look out for
- International funds transfers paid for with cash.
- High-value cash deposits.
- High-volume account activity involving significant amounts of cash.
- International funds transfers where one person is both the ordering and beneficiary customer.
- Multiple customers making international funds transfers to the same overseas beneficiary.
- Large cash withdrawals in a high-risk jurisdiction.
- Multiple international funds transfers to high-risk jurisdictions.
- Regular or multiple cash deposits just below the A$10,000 cash transaction reporting threshold.
The crime
An international drug syndicate imported cocaine and methamphetamine with an estimated value of A$14 million into Australia. The drugs were concealed in beer bottles from Mexico.
A suspicious matter report (SMR) detailed the financial activities of someone who was discovered to be a member of the syndicate and linked to two other syndicate members.
The SMR, combined with information from other authorities, helped AUSTRAC produce a financial intelligence report for our law enforcement partners detailing the financial activities of the syndicate. This led to the conviction of two offenders for attempting to possess commercial quantities of unlawfully imported border controlled drugs.
Penalties
One offender was sentenced to eight years, six months in prison and the other to 17 years.
How business reporting helped
Regulated entities who submitted SMRs, threshold transaction reports, significant cash transaction reports (SCTRs) and international funds transfer instructions (IFTIs) provided crucial information to the investigation.
The SMR that identified the first syndicate member showed that over four days the person had sent two IFTIs to Mexico, each paid for with cash. The transfers appeared structured into amounts of less than A$10,000 to avoid transaction reporting requirements.
AUSTRAC’s role
As well as identifying the first syndicate member through the initial SMR, AUSTRAC helped authorities link two further suspects to the syndicate who had not previously been associated with each other.
Our analysis showed multiple large cash deposits made by both offenders in the two years before the importation. These were believed to be illicit funds associated with importing drugs. Offender A’s transactions included:
- two cash deposits, worth A$10,000 and A$150,000 on two different days
- A$160,000 in cash deposits staggered over four days with a value per transaction between A$10,000 and A$70,000
- a deposit of A$25,000 cash in the month preceding the importation
- a cash deposit funding an international funds transfer of A$50,000 to an account in Turkey in the name of the offender.
Offender B had deposited A$130,000 cash into his personal bank accounts via transactions valued from A$15,000 to A$60,900.
The AUSTRAC database also revealed that members of the syndicate sent high-value IFTIs overseas. They sent A$245,000 to multiple beneficiaries in Mexico over three years via remittance services and a financial institution. Syndicate members also sent IFTIs totalling A$1 million to an account in Turkey in the name of offender A. These funds were sent via banks over 10 months in the year leading up to the importation, at transaction amounts ranging from A$47,000 to A$237,000.
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