Property and cash restrained as alleged money laundering group charged
The AFP has charged nine members of an international money laundering organisation and restrained more than $150 million in Sydney property, cash and luxury items.
The AFP alleges the group enabled multiple transnational serious and organised crime (TSOC) groups to launder funds derived from criminal activities.
It will be alleged the group laundered more than $150 million of their own profits from this enterprise, between 2018 and 2022.
The AFP arrested the alleged head of the money laundering organisation yesterday, (1 February 2023), at his Vaucluse home. It is alleged the man, 43, was a founder of the group and directed its global activities.
Eight other people were also arrested and charged with multiple money laundering and proceeds of crime offences, allegedly carried out in support of the organisation’s extensive activities.
Those charged include:
- A Vaucluse woman, 41;
- A Bellevue Hill man, 45;
- An Epping man, 35;
- A Drummoyne man, 54;
- A Crows Nest man, 41;
- A Mays Hill man, 33, and
- A Yagoona man, 56.
- A Burwood woman, 69 (issued a court attendance notice.)
The Burwood woman is scheduled to face court at a later date. The other eight people are expected to face Downing Centre Local Court today (2 February 2023).
Operation Avarus-Midas identified criminal groups in Australia and offshore allegedly used the money laundering organisation to ensure their money was filtered through legitimate systems and their criminal activities were hidden from law enforcement.
The AFP alleges the money laundering organisation was a global operation uniquely-headquartered in Sydney, which facilitated the movement of illicit money through multiple jurisdictions by multiple means, including exploitation of daigous, casino junkets and the informal value transfer system, which generally occurs outside conventional banking systems.
It will be alleged the syndicate acted as an unregulated multi-national bank, able to draw on cash reserves held in multiple countries around the world to facilitate transactions for criminal clients.
Criminal groups in Australia and offshore allegedly used its services to ensure their money appeared to be filtered through legitimate systems and their criminal activities hidden from law enforcement.
The AFP yesterday executed search warrants at 13 locations across Sydney and seized more than $29 million in cryptocurrency, 18 designer watches, 17 designer handbags, at least 46 items of luxury jewellery and four licenced firearms that were unlawfully stored.
It will be alleged the group provided services at an industrial scale to Australian-based organised crime syndicates, allowing them to move and access their illicit funds across multiple international jurisdictions, while avoiding anti-money laundering obligations.
The AFP-led Criminal Assets Confiscation Taskforce (CACT) has also obtained restraining orders, under the Proceeds of Crime Act 2002 (Cth),
Those orders relate to more than 20 properties in Sydney, including multiple commercial buildings in the CBD and surrounds, two high-value houses in Sydney’s eastern suburbs worth more than $19 million combined, a 360-hectare tract of land near the site of Sydney’s second international airport worth $47 million, 66 bank accounts, cash, and more than $1 million in luxury vehicles.
The CACT worked closely with criminal investigators to identify and restrain more than $150 million of assets which are suspected to be the proceeds of crime. The dual strategy of undertaking parallel criminal and proceeds of crime investigations ensures the AFP and its partner agencies can deliver maximum impact to the criminal environment.
The CACT brings together the resources and expertise of the AFP, Australian Taxation Office, Australian Criminal Intelligence Commission, AUSTRAC and Australian Border Force. Together, these agencies trace, restrain and ultimately confiscate criminal assets.
Operation Avarus-Midas began in early 2022 after information was discovered during money laundering Operation Todorka. This investigation resulted in charges laid against members of a syndicate laundering money for Australian criminal figures.
AFP Assistant Commissioner Eastern Command Kirsty Schofield said money laundering organisations were the lifeblood of organised crime and a major enabler of criminal activity in Australia and internationally.
“This was a sophisticated, complex syndicate established to facilitate the movement of funds regardless of their origin, purpose or harm caused to the Australian community,” Assistant Commissioner Schofield said.
“Money laundering is a global threat which no agency can combat alone. The AFP has relied on its expansive international network during this investigation, and would like to particularly thank the Royal Malaysia Police and the Hong Kong Police Force for their support.
“AUSTRAC has been a key partner in this investigation with its specialist expertise and capabilities.
“I would also like to thank National Australia Bank for their assistance provided during this investigation. The willingness of the private sector to work with law enforcement should send a strong message to organised crime.
“We have not ruled out further arrests in Australia or internationally. We are working closely with our international partners and sharing intelligence to ensure all members of this alleged money laundering organisation are held accountable for their actions.”
The men from Bellevue Hill, Epping and Mays Hill have been charged with conspiracy to deal with money to the value of $1,000,000 or more where there was an intention that the money would become an instrument of crime contrary to section 400.3(1) of the Criminal Code 1995 (Cth). This offence carries a maximum penalty of 25 years in prison.
The women from Vaucluse and Burwood, and the men from Drummoyne, Burwood and Crows Nest have been charged with conspiracy to deal in the proceeds of general crime to the value of $1,000,000 or more, contrary to section 400.3(1A) of the Criminal Code 1995 (Cth). The offence carries a maximum penalty of 25 years in prison.
The 43-year-old man from Vaucluse has been charged with both of the above offences.
The Yagoona man has been charged with aid and abet, counselled or procured the commission of an offence against subsection 39(1) of the Crimes Act 1914 (Cth), and pervert the course of justice in relation to a judicial power of the Commonwealth, contrary to subsection 11.4(1) of the Criminal Code 1995 (Cth), both of which are punishable by five years in prison.
How the Avarus-Midas syndicate works
- A person in Australia wants to buy property, goods or services. This person has legitimate funds held in an offshore bank account in China but laws in China prevent them from transferring large amounts of cash out of China.
- This person turns to a money broker operating locally in Australia to obtain the funds for the purchase. This broker is part of the money laundering organisation operating in Australia unlawfully because they are an unregistered money remitter.
- The money laundering organisation agrees to obtain the cash for the person but charges a fee of up to 10 percent of the value of the money they will provide.
- The person then receives the money in Australia to buy the property, goods or services they wanted.
- As part of this arrangement, the person needs to provide the value of money that they received from the money laundering organisation by transferring funds held in their own China based bank account to another bank account in China controlled by the money laundering organisation, including the agreed fee of up to 10 per cent of the value.
- The money laundering organisation then transfers the money deposited from the person into an MLO shell company account held in China.
- The money laundering organisation profits (the fee), are then transferred by the money laundering organisation to Australian-based companies via shell companies located in various jurisdictions, all of which are controlled by the money laundering organisation.
- The money laundering organisation uses those profits (derived from the fee and associated international currency trading profits) to purchase high value assets including private and commercial real estate in NSW.