Nick McKenzie and Richard Baker
March 27, 2012
The Age
REPRESENTATIVES of American financial giant Western Union are suspected of having helped to move tens of millions of dollars in drug money out of Australia over the past five years, according to inquiries by federal law enforcement agencies.
Police investigations have also identified the branch of a well-known Australian bank remitting millions of dollars out of the country on behalf of organised crime figures from the Balkans.
Since 2007, investigations by the Australian Federal Police and the Australian Crime Commission have identified tens of millions in suspected drug dollars being wired offshore by money remitters, including Western Union sub-agents who use the Western Union name and wire service to send funds overseas.
A law enforcement document seen by The Age states that the AFP’s Operation Basti identified ”multiple Western Union sub-agencies” in Sydney sending money suspected to be the proceeds of drug trafficking.
An ACC operation, codenamed Agrale, which finished in 2010-11, raised similar concerns in respect of a small number of Western Union sub-agencies.
Another briefing circulated among law enforcement agencies states that: ”Western Union moved over AUD $700 million in funds from Australia in the last financial year and is in direct competition with Australia’s big four banks … [law enforcement officials suspect] that a significant proportion of these funds are criminal proceeds.”
Investigators believe a small number of Western Union sub-agencies and other independent remitters have moved tainted cash by mixing it with legal funds or dividing it up and sending it in amounts under $10,000. Amounts less than $10,000 are not required to be reported to the government’s anti-money laundering agency, Austrac. In a report released last year, Austrac said it was aware of cases where Australian-based remittance businesses were used as a third party to move funds or settle transactions involving two or more foreign countries.
After a sustained behind-the-scenes effort by Australian and overseas law enforcement agencies over the past decade, Western Union has moved to improve the conduct and monitoring of its sub-agents.
A Western Union spokesman told The Age that the company has ”co-operated with law enforcement on investigations of specific agent locations”.
”To the best of our knowledge, no agents or their sub-agents have been prosecuted for offering Western Union branded remittance services in Australia … in any event, we work closely with Australian law enforcement with the aim to deter anyone seeking to violate the service we offer.”
The spokesman said it had ”routinely taken action against agents whose compliance programs we deem to be inadequate”.
This included agents being put on probation and under greater scrutiny and others being terminated from the Western Union network, he said, adding that money laundering was a problem for the entire financial services industry.
In a separate development, authorities in New South Wales have gathered intelligence suggesting that a branch of a well-known bank has been used by organised criminals in Australia to send tainted funds – including those related to drug trafficking – to accounts in the Balkans.
Officials have concerns that some of these funds may have reached paramilitary groups in the region.
Subscribe to our free mailing list and always be the first to receive the latest news and updates.