Welfare recipients found with $100,000 cash and cannabis

The crime

A credit union submitted a suspicious matter report (SMR) to AUSTRAC about the financial activities of a married couple (offenders A and B) who appeared to have structured a transaction to avoid reporting requirements. The SMR outlined how:

• the couple held a joint account with the reporting entity
• Offender A telephoned the credit union to say she wanted to withdraw A$15,000 cash from her personal account
• credit union employees told Offender A that the A$15,000 withdrawal would require a significant cash transaction report (SCTR) to be made
• Offender A then visited a branch of the credit union and withdrew A$9800 on one day and A$5200 the following day.

AUSTRAC provided the SMR information to authorities for investigation. They found the offender’s account activity showed government welfare payments, a large number of transactions at a casino and large cheque deposits.

AUSTRAC then analysed additional credit union SMRs that showed:

• Offender A was a signatory to an account held in a relative's name
• Offender A periodically deposited cash into the relative's account, including four cash deposits totalling A$20,000 over one month, structured into amounts from A$2000 to A$9000
• Offender A and the relative visited a branch of the credit union and they deposited A$9000 and A$6000 cash (respectively) into their personal accounts at different counters
• credit union employees noticed the relative seemed nervous while making the deposits
• the relative withdrew A$50,000 by cheque from his account to buy a motor vehicle.

These SMRs became part of a financial picture that indicated offenders A and B had substantial assets inconsistent with their declared income. Over six years they deposited A$1.37 million into their accounts and bought assets including a house, two motor vehicles and three motorcycles. Offender B also travelled overseas often, and AUSTRAC found that in the same year the credit union submitted the SMRs, Offender B reported he was carrying A$16,000 cash when he left Australia for the Philippines.

Offenders A and B had also accumulated debts of approximately A$70,000 each for welfare payments they were not entitled to.

The investigation revealed both offenders had obtained 15kg of cannabis and arranged for a courier (Offender C) to transport it interstate. Law enforcement officers found the cannabis concealed in a vehicle and arrested Offender C.

Authorities seized approximately A$75,000 cash, receipts for goods worth A$400,000 bought with cash, and documents that indicated offenders A and B were trafficking in cannabis. They were both arrested and charged with crimes relating to drug trafficking and dealing with the proceeds of crime.

Penalties

Offender A was sentenced to four years and 10 months in prison. Offender B proceedings before court were not finalised. Offender C received a suspended sentence of two years and nine months in prison.

Authorities seized and froze assets including a house, two motor vehicles, three motorcycles, approximately A$75,000 in cash and A$25,000 in a bank account.

How business reporting helped

The SMRs passed to authorities by AUSTRAC helped prompt law enforcement to investigate the unexplained wealth of offenders A and B.

AUSTRAC’s role

AUSTRAC’s data and analysis was key to constructing the financial picture of the couple’s unexplained wealth.