Focus on scams from ‘money muling’ to ‘micro-laundering’
“It’s allowing us to get access to bigger amounts of data and information in a much faster way, and it then allows us to bring a bunch of different perspectives to analysing that data and information to give us a better understanding of the criminal threats, risks to the financial system and, importantly, big criminal networks,” he says.
The alliance is being used to detect other scams like micro-laundering where illicit funds are mingled with money from legitimate sources and moved at volume through low-value digital transactions.
Money muling is another issue the alliance has uncovered. It involves students from overseas receiving ads to sell their bank accounts after they leave Australia. It gives criminals control of bank accounts that have already been vetted by the banks and are not considered a threat.
Scambling is another threat not captured by traditional AUSTRAC reporting thresholds. It involves unlicensed gambling operators tricking people onto scam websites and then to participate in gambling. A campaign by the watchdog found scambling to be a particular problem in regional and remote Aboriginal communities.
Co-operation through the Fintel Alliance represents a remarkable turnaround in the relationship between the regulator and the companies it regulates.
A data haul from Australia’s largest banks helped uncover a money-laundering scam operating across bank ATMs in Melbourne late last year. Credit: Kate Geraghty
In 2020, Westpac was ordered by the courts to pay a $1.3 billion fine for money-laundering breaches after AUSTRAC brought action against the bank.
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The Commonwealth Bank paid a $700 million fine in 2018, Crown was hit with a $350 million penalty in 2023, and Star Entertainment is due to appear in court next month and may face a $300 million fine for alleged money-laundering breaches.
The banks and casinos have beefed up their anti-money laundering units in response to these cases which has helped boost the effectiveness of the alliance. In turn, it allows these companies to check whether their controls are working effectively, spot any weaknesses in their systems and reduce the risk of money-laundering breaches.
“Criminals are adept at finding the weak points. By working together to develop and use new tools, technologies and fresh approaches to combat crime, we can strengthen the ecosystem we all operate in,” says ANZ Group’s financial crime risk boss, Cassandra Hewett.
To give an idea of how much things have changed, NAB’s financial crime risk boss Paul Jevtovic was AUSTRAC’s chief executive when the Fintel Alliance was first introduced.
For AUSTRAC, the next step is to take the program global. After all, that is where most of the money being laundered in Australia is coming from.
“Organised crime is a global business,” Thomas says.
“We’ve got billions of dollars moving between jurisdictions around the world, and we can all take action in our own jurisdictions to combat that much (more strongly) if we’ve got international governments, global banks and others working together across multiple jurisdictions to try and combat crime.
