January 23, 2014
Terrorist groups are profiting as part of a money-laundering operation involving the hundreds of millions of dollars Australians spend on illegal drugs.
The revelations come as Australia’s biggest money-laundering probe, Project Eligo, has identified hundreds of unwitting Australian residents being duped into helping launder the drug money overseas, including funds generated by outlaw motorcycle groups and people-smuggling operations.
The money-laundering investigation has uncovered 40 separate money-laundering operations across Australia that are involved in moving hundreds of millions of dollars in drug money offshore.
The operation has so far seized $26 million in dirty cash, restrained $30 million of houses and other assets funded by drug money and intercepted drug shipments totalling more than $530 million dollars.
It is believed at least one of the exchange houses used in the Australian operation delivers a cut from every dollar it launders to Lebanese militant group Hezbollah, whose military wing has been proscribed in Australia as a terrorist organisation.
Last year, the US government identified two Lebanese exchange houses, Kassem Rmeiti and Halawi Exchange, as drug money cleaners financing Hezbollah.
Taskforce Eligo has for at least 12 months been monitoring the businesses behind the movement of drug money from Australia. The process has led to the identification of almost 130 serious organised-crime figures previously unknown to law-enforcement agencies.
The revelations about the taskforce come with the federal government planning to revamp the nation’s asset confiscation and unexplained wealth regime. Most state governments and police forces are failing to back a push from federal agencies to fully utilise seizure powers.
One senior police source said that while Australia was good at tracking and freezing drug money heading overseas, it struggled to do the same thing to proceeds of crime locally.
Acting Australian Crime Commission operations manager Col Blanch said the taskforce investigation had tracked ”people-smuggling money … and bikie money”. Most of the funds moved involve the proceeds of drug trafficking.
A major impediment to the local struggle against organised crime has also been significant cuts made over the past three years to the ACC budget, forcing it to rely on the resources of other agencies.
Mr Blanch said that due to the scale of the operation, his agency had to call for the help of state and federal police and the US Drug Enforcement Administration.
”The amount of money and targets overwhelmed us. So all the agencies had to come working together.
”We saw this network of people whose job was to deliver money to banks,” Mr Blanch said. ”It was just never ending. We were regularly finding bags of $500,000 and $400,000.”
In one case, the ACC tracked a Mexican man working for a South American syndicate travelling to a property at Diggers Rest in rural Victoria. There, Vietnamese drug distributors were to give the Mexican a large amount of cash to be laundered offshore.
”People are paying ridiculous prices for drugs. The South Americans are obviously realising the potential for large profits,” Mr Blanch said.
One of the ways drug money can be laundered offshore involves crime figures targeting Australian residents – mostly foreign nationals and students – who are expecting a foreign bank, remittance service or business overseas to send money into their local account. Instead of this occurring, the crime figures deposit Australian drug money into the bank accounts of the unsuspecting victims and request money from the the bank or business overseas.
The scheme usually needs trust-based informal banking, remittance and exchange house services – commonly found in Vietnam, China and the Middle East – to be infiltrated by money-laundering networks.
Mr Blanch said that people in Australia needed to be aware their bank accounts could be exploited in such a fashion.
”We are trying to educate these innocent people. If we have new arrivals in the country, we want to educate them. If they are moving their money this way you risk being exploited by serious organised criminals.”
Another scheme involves the identification cards of foreign students being copied and used to set up local bank accounts.
”We have found the students have been remitting large amounts of money when they are not even in Australia.”