ANALYSIS: Australian police forging direct ties with major banks to combat laundering

The Australian Federal Police (AFP) has taken its work with the financial intelligence community to a new level by forging direct partnerships with Australia’s “big four” banks, including a formal undertaking to work together with NAB and ANZ.

The national crime-fighting agency has developed a “bilateral” information-sharing model where banks are able to feed it intelligence on suspected criminal groups. This unprecedented level of engagement is in addition to the financial intelligence reports the banks already send to the Australian Transaction Reports and Analysis Centre (AUSTRAC).

At this stage the AFP has signed MoUs with National Australia Bank (NAB) and Australia and New Zealand Banking Group (ANZ). It is also in advanced partnership discussions with Commonwealth Bank (CBA) and Westpac.

These MoUs have already allowed real-time information sharing to help police run targeted investigations and work more closely with Australian anti-money laundering (AML) teams on the sharing of intelligence and data.

Russel Smith, a detective superintendent who heads up the AFP’s money laundering team, said this new level of engagement with banks was proving critically important in combatting financial crime.

“Some of the work that’s evolved through those MoUs has enabled our short-term money laundering teams here in Sydney, for example to share real-time data to develop a deeper understanding of people who are engaged in money laundering,” Det Supt Smith told Regulatory Intelligence.

“When we work closely with the banks we begin to understand where the AFP needs to focus its resources. Then through our own capabilities, our own physical and electronic surveillance, that’s enabled us on a number of occasions to arrest those actively involved in real time money laundering activity.”

The AFP official said these creative and ground-breaking approaches to ‘fintel’ sharing were essential in the fast-moving criminal landscape.

“Those are the sort of results that we’re getting from this recent engagement with the banks,” Det Supt Smith said.

“The capitalisation of that, going forward, is just getting better and better.”

Circle of trust

The AFP has been bolstering and strengthening its relationship with AUSTRAC over recent years. This received a boost in 2017 with the establishment of the Home Affairs portfolio. The agencies have since moved back to the Attorney-General’s Portfolio, where they continue to enjoy a close working relationship.

“It’s super important; it is critical,” Det Supt Smith said. “We have gone to a lot of extremes in the last probably 18 months to really push up on our engagement with AUSTRAC, who are, you know, our primary partners in the fight against money laundering.”

The AFP was aware of the wealth of intelligence that AUSTRAC and its reporting entities hold, Smith said. This was invaluable to police intelligence analysts, operationally and strategically, to support the operational staff in their policing work.

Financial intelligence can inform the AFP of emerging threats and trends, as well as opening up new leads in existing investigations, he said.

At present the AFP has bilateral relationships with AUSTRAC and has posted a police officer to work directly within the financial intelligence unit (FIU). In addition, AUSTRAC has appointed a large number of financial intelligence analysts to work directly inside the AFP on major cases.

Through this collaborative work the agencies can share better intelligence with frontline police and operate far more quickly and effectively than they did in the past.

Public-private partnerships

The Australia Fintel Alliance public-private partnership, which allows its members to work physically alongside each other within the same secure facilities, also acts as a forum to facilitate intelligence sharing. This creates a larger circle of collaboration to complement the direct MoUs with banks, which have been set up more recently.

“Through the Fintel Alliance, and AUSTRAC’s engagement, we look at ways in which we can work more closely with the financial institutions,” Smith said.

This collaboration has led to the creation of a number of working groups with a focus on transnational serious and organised crime (TSOC) and money laundering.

“That just showcases the importance of sharing intelligence to inform decision making — operationally and strategically,” Smith said. “It makes us so much more effective in that money laundering space.

Looking to the future

Looking ahead, the AFP will increasingly be looking to increase its direct partnerships with financial institutions to improve real-time intelligence gathering.

Stefan Jerga, who leads the AFP’s criminal asset confiscation team, said the agency would continue to push the boundaries to combat money laundering and other financial crimes.

“With an extensive global reach and long-standing international partnerships, the AFP is uniquely placed to bring together law enforcement efforts in this space,” Jerga said.

“The AFP has been successful in restraining more than A$200 million from offshore locations since 2012. While our colleagues across the AFP continue to do great work investigating crimes and putting offenders behind bars, the Criminal Assets Confiscation Taskforce (CACT) will continue to hit where it hurts most: their wallets their lavish lifestyles and their profits.”

Jerga said the recent AN0M case highlighted the level of determination that the Australian authorities would bring to the fight against money laundering. This saw the AFP rolling out an encrypted phone service that ended up giving it “eyes and ears” in the back pocket of more than 9,000 organised criminals.

The agency continues to pursue convictions as a result of the ground-breaking project.

Late week Duc Thach Bui, a 27-year-old Vietnamese national living in Punchbowl, was sentenced to three years’ jail for his involvement in an A$1.7 million money laundering scheme. The money was linked to an alleged drug syndicate.

Police began using the AN0M intercepts to monitor Bui’s crime syndicate in April 2021. They watched the importation of illicit drugs, interstate drug trafficking and the movement of the resulting proceeds of crime.

In May 2021, they watched as freezer bags full of cash were handed over to the driver of a vehicle. The vehicle drove to Bui’s house in Punchbowl, where police executed a search warrant.

The found A$1,718,635 of bundled cash in freezer bags in Bui’s bedroom, along with five mobile phones and two cash-counting machines. Bui’s fingerprints were found on some of the items, including cash and the counting machines.

Detective Inspector Luke Wilson, of the AFP, said seizing the money linked to crime was essential to disrupt TSOC syndicates such as this one.

“People who help drug traffickers to access their criminal profits may buy goods or assets to try to legitimise the cash without alerting law enforcement,” Det Insp Wilson said.

“Most organised crime is motivated by money and when you take away the profits, you hit offenders where it hurts most.”

Bui eventually pleaded guilty to dealing in the proceeds of crime worth A$1 million or more, which is an offence under section 400.3(2A) of the Criminal Code Act 1995 (Cth).

On Thursday Bui was sentenced to three years’ jail and must serve a minimum of one year and 11 months behind bars.

The anti-money laundering community could expect to see many more similar cases coming before the courts in the future, Jerga said.

“Our highly skilled investigators will continue to be unrelenting and use every legal and operational avenue available to seize illicit wealth from criminals to take the profit out of their crimes and disrupt further investment in their legal operations,” Jerga said.