Daily Management Review

Accusations Of Massive Money-Laundering Breaches Leveled Against Australia's Commonwealth Bank


08/04/2017




Accusations Of Massive Money-Laundering Breaches Leveled Against Australia's Commonwealth Bank
Accusations of widespread breaches of money-laundering and counter-terrorism financing rules were leveled against Australia’s biggest mortgage lender, Commonwealth Bank of Australia by the government of the country on Thursday.
 
In what is being considered to be the biggest case of its kind in Australia and the first against a major bank, for "serious and systemic non-compliance", it had initiated civil penalty proceedings in the Federal Court against CommBank, Financial intelligence agency AUSTRAC said.
 
"The effect of CommBank's conduct in this matter has exposed the Australian community to serious and ongoing financial crime", AUSTRAC said in a court filing.
 
It was reviewing the allegations and will file a statement of defense, Commonwealth Bank said in a statement.
 
"We would never deliberately undertake action that enables any form of crime", the bank said in a statement on Friday.
 
AUSTRAC said that suspicious matters "either on time or at all involving transactions totalling over A$77 million ($61 million)", were failed to be reported by Australia's biggest mortgage lender.
 
Particularly with regards to so-called intelligent deposit machines, or IDMs, allegations of about 53,700 contraventions of the anti-money laundering and counter-terrorism in the bank network had occurred, the agency alleged.
 
With only 108 alleged breaches, Australia's top bookmaker Tabcorp Holdings, had been earlier accused of similar cases and earlier this year, the biggest such case before this one had emerged. Consequently, noting the biggest civil penalty in Australian corporate history, Tabcorp paid A$45 million in fines.
 
On the issue of a possible penalties facing CommBank or whether other banks could be in the agency's firing line, there were no comments given by an AUSTRAC spokeswoman.
 
A$18 million per breach is the maximum penalty for contravening the anti-money laundering and counter terrorism financing law.
 
Accepting deposits by both cash and cheque, and facilitate anonymous cash deposits are IDMs which are a special type of automated teller machines.
 
AUSTRAC said that since their rollout in May 2012, there had been significant growth in the use of CommBank's IDMs. Compared with A$89 million in the first six months after CommBank introduced the machines, cash deposits in the six months to June 2016 surged to A$5.8 billion.
 
AUSTRAC alleges in its court filings that with proceeds going to drug importation syndicates, cash was deposited using fake names.
 
"Even after suspected money laundering or structuring on Commbank accounts had been brought to CommBank's attention, CommBank did not monitor its customers with a view to mitigating and managing money laundering/terrorism financing risk", the court filing shows.
 
AUSTRAC added that "cuckoo smurfing", a form of money laundering which involves transfers between countries without the need for money to actually cross international borders, were also conducted by users through the use of CommBank accounts.
 
(Source:www.reuters.com) 






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