These details are very bad - criminals were able to smuggle huge sums out of Australia.
14. Even after suspected money laundering or structuring on CommBank accounts had been brought to CommBank's attention (by law enforcement or through internal analysis), CommBank did not monitor its customers with a view to mitigating and managing ML/TF risk, including the ongoing ML/TF risks of doing business with these customers. Rather, once suspected money laundering or structuring had been identified on these accounts, CommBank often looked no further than whether or not to submit an SMR. The Rules require mandatory enhanced customer due diligence (ECDD) where a s 41 suspicion is formed. CommBank did not carry out any ECDD on these accounts (such as identifying the source of the customer's wealth or terminating accounts) either at all or until after several SMRs had been raised. When CommBank terminated accounts, customers were generally given 30 days' notice. Suspicious transactions were allowed to, and did, continue during the notice period on some of these accounts.
Money laundering Syndicate No I
15. From late 2014 to August 2015, approximately $20.59 million was deposited, mostly in structured cash deposits, through CommBank lDMs into 30 CommBank accounts, 29 of which were in fake names. Shortly after each deposit, the money was transferred internationally. Approximately $20.56 million was transferred offshore. Two individuals have been convicted of dealing with proceeds of crime and structuring offences in relation to this activity.
16. By April 2015, CommBank had identified repeated, suspicious and connected patterns of structured cash deposits followed by international money transfers on 16 of these accounts (15 of which were in fake names). Notwithstanding this suspicion, between April and 1 July 2015, CommBank permitted approximately $9.1 million to be transferred from these'accounts to Hong Kong.
17. The AFP requested CommBank prevent withdrawals and transfers on these accounts on 1 July 2015. By that time, CommBank had identified a particular methodology for these accounts - they were opened by certain foreign nationals on holiday visas and deposits through lDMs were made involving blatant structuring, followed by transfers offshore almost immediately thereafter.
18. Between 1 July 2015 and 24 August 2015, the same syndicate laundered approximately $4.78 million using 11 further accounts opened in fake names. Those accounts used the same methodology previously identified by CommBank and yet were not appropriately monitored having regard to the ML/TF risks and were not always the subject of SMRs that complied with s 41.
19. 60 of the Late TTRs recorded transactions of this syndicate, with a value of $629,200. On 92 occasions CommBank failed to report suspicions relating to this syndicate, either at all or on time as required by s 41, involving transactions totalling approximately $22.7 million.
Money laundering Syndicate No 2
20. Between June 2014 and January 2015,3 individuals deposited $2,272,435 in cash into 3 respective CommBank accounts (largely through lDMs). Almost immediately after each deposit, the money was transferred domestically, including to money remitters. By July 2014, CommBank was aware of unusual patterns of transactions on I of these accounts and had identified a number of deposits which were structured, By October 2014, CommBank was aware of suspicious transactions on the second of these accounts, and by November 2014, CommBank was aware of suspicious transactions on the third account. However, CommBank continued to allow these individuals to transact on these accounts until they were each arrested on 19 January 2015. These 3 individuals have been charged with dealing in proceeds of crime, in connection with a drug importation syndicate, with I of these individuals already having been convicted.
21. Between March 2014 and November 2015, a further $4053 million was deposited, in cash, into 9 other CommBank accounts, followed by domestic transfers to accounts which had previously received funds from the three individuals. Even after CommBank identified structuring on the deposits, and identified some of these accounts as belonging to suspicious money remitters or being part of a sophisticated money laundering syndicate, CommBank allowed transactions to continue.
22. 178 of the Late TTRs recorded transactions involving this syndicate or related third party accounts, with a value of $1,780,030. On 18 occasions CommBank failed to report suspicions relating to this syndicate or related third party accounts, either at all or on time as required by s 41, involving transactions totalling approximately $5.73 million.
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Money laundering Syndicate No 3
23. From November 2014 to August 2015, cash deposits totalling $27.2 million were made to one CommBank account. Almost immediately after each deposit, the money was transferred internationally. $26.47 million was transferred to offshore accounts. The deposits were the proceeds of a drug manufacture and importation syndicate. Three individuals have been charged with dealing in proceeds of crime, with 1 of these individuals already having been convicted.
24. Despite cash deposits under $10,000 being made into this account, no transaction monitoring alerts for structuring were ever raised. Very large cash deposits, up to $532,500, were also regularly being made at branches. Some alerts were raised for these large deposits, but were not reviewed in a timely manner, having regard to the MLITF risks. By no later than 28 April 2015, CommBank considered the account to be high risk and suspicious. By this time, $14.7 million had already been sent offshore. However, CommBank did not monitor this customer having regard to the MUTE risks and permitted the highly suspicious activity to continue, with $12.2 million in cash deposits received and $11.8 million remitted overseas after 28 April 2015. Although the pattern of structured deposits, large cash deposits and international transfers occurred almost daily, an SMR was only lodged around every 3 months or so for this account,
25. 514 of the Late TTRs recorded transactions into this CommBank account or into the account of related persons, with a value of $5,435,860. On 3 occasions CommBank failed to report suspicions relating to this syndicate, either at all or on time as required by s 41, involving transactions totalling approximately $10.1 million.
Money laundering Syndicate No 4
26. Between February 2015 and May 2016, over $21 million was deposited in cash into 11 CommBank accounts. These deposits were the illicit proceeds of a drug importation and distribution syndicate. More than half of the deposits occurred through IDMs. Shortly after each deposit, the money was transferred to other domestic accounts. Transfers were made across a number of these accounts to the same recipients, some of which were known as early as May 2015 to CommBank to be suspicious entities, including accounts connected to Syndicate No 2.
27. A number of transactions on these accounts were not the subject of any transaction monitoring alerts, in spite of large and structured cash deposits being made. However, by mid-2015, CommBank was aware of unusual patterns of transactions and suspected structuring of cash deposits on 4 of the accounts. CommBank became aware of unusual and suspicious transactions on the remaining accounts later in 2015. ConimBank also identified a connection between suspicious activity on a number of these accounts. Despite these matters, CommBank did not monitor these customers having regard to the MLITF risks, and permitted transactions to continue on these accounts.
28. The AFP advised CommBank in late 2015 that a number of these accounts were connected with an investigation into serious criminal offences including 'drug importation and unlawful processing of money'. Comm Bank permitted several of the accounts to remain open even after this time and further transactions occurred. Eight individuals have been charged with dealing in proceeds of crime, with 6 of these individuals already having been convicted.
29. 888 of the Late TTRs record transactions on these accounts and a related party's account, with a value of $9,462,095. On 27 occasions CommBank failed to report suspicions relating to this syndicate, either at all or on time as required by s 41, involving transactions totalling approximately $34.3 million.
Cuckoo smurfing syndicate - Strike Force A
30. CommBank accounts were used for "cuckoo smurfing", a form of money laundering which involves transfers of money between associates within separate countries in such a way that obviates the need for money to cross international borders.
31. In May 2015, 2 individuals were arrested and charged with money laundering and structuring offences, which were allegedly committed by structured cash deposits made into a number of ComrnBank accounts, as part of a "cuckoo smurfing" syndicate. NSW Police alleged that some
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$1.784 million was laundered through 99 CommBank accounts between 7 October 2014 and 21 May 2015 (Strike Force Al). NSW Police first advised CommBank that it was investigating money laundering and structuring on these accounts on 26 May 2015.
32. Between 24 October 2011 and 18 June 2016, 902 cash deposits under $10,000, totalling $7.2 million, were deposited into 12 CommBank accounts - 10 of these accounts being Strike Force Al accounts and a further two accounts related to Strike Force Al accounts. On 20 occasions, CommBank failed to report $2,311,902 in cash deposits to 11 of these 12 accounts that it suspected were structured, contrary to s 41. CommBank failed to monitor these customers with a view to identifying, mitigating and managing ML/TF risk.
33. In January 2015, another individual was arrested and charged with money laundering and structuring offences, which were allegedly committed by structured cash deposits made into a number of CommBank accounts, as part of a cuckoo smurfing syndicate. NSW Police alleged that some $273,432 was laundered through 39 CommBank accounts between 10 October 2014 and 19 January 2015 (Strike Force A2). NSW Police advised CommBank that it was investigating money laundering and structuring on these accounts on 20 March 2015.
34. Between 31 January 2012 and 18 April 2016, 276 cash deposits under $10,000 totalling $1.7 million, were deposited into 6 of the Strike Force A2 accounts. On 20 March 2015 NSW Police advised CommBank that it believed these 6 accounts had been specifically generated for the purposes of money laundering. On 11 occasions, CommBank failed to report $1,250,534 in cash deposits to 5 of these accounts that it suspected were structured, contrary to s 41. CommBank failed to monitor these customers with a view to identifying, mitigating and managing ML/TF risk.
Additional suspicious matters involving structuring, lDMs and unlawful activity Unregistered remittance business
35. Having identified patterns of suspicious cash deposits into lDMs, in mid-2015 CommBank carried out a review of all customers that made 3 or more ATM cash deposits over $5,000 since 1 January 2015. This review resulted in CommBank suspecting a number of customers as being linked to unlawful activity. CommBank failed to report its suspicions with respect to I of these customers who was suspected of running an unregistered remittance service.
36. CommBank had previously failed to report suspicions with respect to this customer. Between 25 June 2014 and 14 July 2014, 85 cash deposits, both large and structured, at branches and through lDMs and totalling $491,724, were made into this CommBank account. CcmmBank failed to report its suspicions in relation to this customer and the $491,724 in third party cash deposits, contravening s 41 on 2 occasions. CommBank failed to monitor this customer with a view to identifying, mitigating and managing ML/TF risk.
January 2017 1DM deposits
37. Over 5 days in January 2017, CommBank accepted cash deposits totalling $320,000 through lDMs into a single bank account. CommBank failed to submit an SMR to AUSTRAC reporting its suspicions in relation to both large and structured cash deposits, and reported suspicious third party transfers into this account late.
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