Australia's Biggest Mortgage Lender Accused of Money Laundering Breaches

Andrew Cummings
August 4, 2017

The federal government's financial intelligence unit AUSTRAC on Thursday launched civil penalty proceedings in the Federal Court, accusing the lender of more than 53,700 contraventions of law.

Cash banking transactions of $10,000 or more must be reported to Austrlian authorities.

"We cooperated with Austrac's review of ATMs and Intelligent Deposit Machines, which found ANZ is compliant with all relevant Anti-Money Laundering and Counter-Terrorism Financing laws", the spokesperson said. A spokesman for the bank declined to provide specific details around the types of machines that were removed but said the bank was working closely with Austrac.

The financial intelligence regulator alleges that CBA did not comply with its own AML/CTF program, because it did not carry out any assessment of the money laundering and terrorism financing (ML/TF) risk of IDMs before their rollout in 2012. These ATM machines accept cash and cheques anonymously - which means criminals or terrorist sympathisers could potentially deposit up to $20,000 in cash or 50 cheques at a time without ever meeting a bank teller or providing ID.

The bank also faces allegations that it did not carry out a proper money-laundering or terrorism-financing risk assessment of its intelligent deposit machines until almost $9 billion had been deposited in them.

The action against CBA comes after gaming giant Tabcorp (which wants to merge with Tatts) paid $45 million to settle a money-laundering case with Austrac in February of this year.

"CBA failed to give 53,506 threshold transaction reports (TTRs) to AUSTRAC on time for cash transactions of $10,000 or more through IDMs from November 2012 to September 2015". After the bank identified "repeated, suspicions and connected" patterns of cash deposits, it permitted a further approximately A$9.1 million to be transferred from these accounts to Hong Kong, Austrac said.

"By failing to have sound systems and controls in place, businesses are at risk of being misused for criminal purposes", AUSTRAC acting chief executive Peter Clark told ABC News.

The bank faces a maximum penalty of 18m Australian dollars for each of the 53,700 alleged breaches. "We will continue to work in this way with our industry partners who also share this aim and demonstrate a strong commitment to it".

'We take our regulatory obligations extremely seriously and we are one of the largest reporters to AUSTRAC.

"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 claims. The bank said it has worked to continuously improve compliance, and kept the agency up-to-date on its efforts.

The Commonwealth today acknowledged the civil proceedings.

The bank said it had invested more than $230 million in its anti-money laundering compliance and reporting processes and systems.

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