Misuse of banking system (Use of False Identification)

An individual involved in large-scale bank fraud created a range of false identification documents to open bank accounts and apply for personal loans and credit cards. The individual deposited the money received from the loans into a bank account. The bank statement received for the account was then used at another bank as proof of financial means to apply for further loans.

The offender initially opened savings accounts and credit cards with the loan funds, which were then deposited to another account after approval. Once the money was in the account, either the offender or one of two associates withdrew the funds as bank cheques (on the justification of buying a car or similar) made out to other false identities with false accounts and then deposited the cheque/s into these accounts. Funds were also withdrawn via ATMs or bank branches. The offender repeated this process using multiple false identities, fraudulently generating over US$908,000 in funds.

Indicators:

• An individual or business client has multiple bank accounts with several institutions, but with no economic rationale for having them
• Customer is known to be operating multiple accounts
• Multiple bank cheques purchased by different individuals but payable to a common beneficiary
• Payments by large third party cheques endorsed in favour of the customer
• Use of false Identification Documentation

Misuse of banking system (Structured Transactions)

A SAR lodged by an officer at an authorised deposit-taking institution triggered an investigation into the supply of illegal drugs. The SAR detailed the daily occurrence of cash withdrawals of US$4,100 by an individual. These withdrawals continued over a three-week period and totalled US$54,500.

As a result of this report, law enforcement was able to connect the individual to a known drug dealer and arrest the offender and several associates, including the drug dealer.

Indicators:

• Daily cash withdrawals
• Structured withdrawals clustered over a period of time

Misuse of banking system (Use of Children’s Accounts)

The individuals involved opened bank accounts in the names of their infant grandchildren. These accounts were then used to move in excess of US$183,000 in cash deposits. These funds were used to purchase luxury motor vehicles and property for the individuals in question.

When law enforcement officers investigated the case further, they uncovered a money laundering operation and large-scale cocaine importation. The resulting law enforcement investigation has led to the confiscation of approximately US$15,000,000 in cash and a further US$3,634,000 in other assets.

Indicators:

• Children’s account used to facilitate the purchase of high-value assets (motor vehicles, property)
• Large cash deposits into accounts
• Operation of account inconsistent with its intended purpose

Misuse of banking system (By an Accountant)

An accountant employed by an educational institution and another company was alleged to have defrauded these two organisations of approximately US$266,000.

The accountant’s method was to redirect company payments for legitimate invoices to his personal account. When a payment reminder for the invoice was received he organised payment to the creditor. The accountant wrote an invoice for double payment and claimed one payment himself. The accountant also created false invoices/payments to himself from the company.

A credit union lodged a SAR detailing the accountant’s suspicious conduct involving high-value cash and cheque deposits and withdrawals. The basis of the suspicion was that none of the transactions were over 10,000 and the transactional activity did not correspond with the profile of the customer.

The information also detailed the accountant’s use of wire transfers to Country A and Country B. These transactions were between amounts of US$3,600 and US$10,000 and were all conducted through the same bank branch within several days of each other.

Indicators:

• Activity is inconsistent with customer profile
• False invoicing
• Structured deposits clustered over a period of time
• Structured withdrawals clustered over a period of time
• Transactions occurring in a cluster made by the same person
• International wire transfers to countries known to be high risk terrorism financing jurisdictions

The accountant was arrested and ultimately charged with multiple counts of fraud.

Misuse of banking system (Deposit by 3rd Party)

Authorities began investigating the activities of a student after a bank lodged a SAR describing a large cash deposit made into the student’s account. The SAR described a deposit of US$91,000 cash made into the account by a third party claiming to be a relative of the student. The bank also indicated that a deposit of US$24,000 had previously been made into the same account at the same branch. Prior to these deposits there had been little activity in the student’s account. The large deposits were inconsistent with the student’s profile and past account activity and authorities continued investigating the student’s apparent unexplained wealth. Further enquiries revealed that the funds had then been withdrawn from the account with a bank cheque and that the cheque had been made out to a company. Law enforcement officers suspected the funds were the result of illicit activities and took action to restrain them.

Indicators:

• Account activity inconsistent with customer profile
• Multiple transactions on the same day
• Large cash deposit
• Use of inactive account
• Use of third party to conduct transactions

Use of remittance services

A law enforcement investigation revealed that a number of organised crime syndicates were using a network of money remittance dealers in Country A to launder the proceeds of drug importation and distribution operations. The network of money remitters was controlled by a husband and wife and the wife’s mother in Country B. The money remitters operated out of several shops, which were used by suspects from major crime syndicates from Country B based in Country A. The suspects transferred money to syndicates in Country B. The money remitters used various methods to prevent authorities from detecting their money laundering activities. These methods included:

• failing to report transactions
• concealing the identity of their clients and the overseas recipients
• using other remitters to reduce the size of the international transfers and conceal the frequency of the international transfers
• paying airline pilots to physically carry large amounts of cash overseas.

Employees of major banks were also investigated for their failure to report large-volume deposits and transfers made through the remittance dealers’ bank accounts.

Investigators charged the proprietors of the money remittance providers and associated businesses with laundering in excess of US$85,000,000. One of the airline pilots also pleaded guilty to money laundering.

Indicators:

• Structuring of funds transfers
• Use of cash couriers
• Use of multiple remittance service providers to transfer funds to common overseas beneficiaries

Purchase of high-value assets (Real Estate & Vehicle)

Approximately 60 bank deposits of amounts less than 10,000 were deposited into an individual’s account within a four-month period, totalling US$500,000. Money was also deposited at a credit union.

Following this series of structured deposits into the accounts, the individual in question purchased three real estate properties with bank cheques, and a high-value motor vehicle with US$61,000 cash. It is not known how the significant amount of cash required to pay for the car was delivered to the motor vehicle dealer, but it was withdrawn from a bank account and paid to the dealer in two installments.

A law enforcement investigation commenced and the suspect was eventually charged with supplying prohibited drugs and money laundering offences, and approximately US$1,364,000 worth of assets have been restrained.

Indicators:

• Cash purchases of high-value assets (motor vehicle, real estate)
• Structured deposits clustered over a period of time
• Use of bank cheques

Purchase of Real Estate (Using a False Name)

A law enforcement agency investigated a matter involving a drug offender growing a large crop of cannabis on a property. When the individual was arrested for this offence, it was established that the person had purchased the block of land under a false name.

Initial inquiries revealed the property was registered as being owned by a different person. Further inquiries made with another government department revealed the registered owner of the land had the same first names as the offender, but a different surname. The registered land owner’s recorded date of birth was also very similar to that of the offender, with the year and month identical, but the day slightly different.

It was alleged the offender had purchased the property under a false name, as no identification was required by the real estate agent to sign the contract. It is further suspected the offender took the contract to a solicitor for conveyancing and had the solicitor sign the transfer documents on the offender’s behalf. The sale was executed in 2002, but the final payment not made until 2004. The final payment was made via a solicitor. This payment method was written into the contract.

This case highlights the importance of customer identification, particularly in relation to real estate

Indicators:

• Unusual payment arrangement included in the terms of contract
• Use of false name
• Use of gatekeepers (solicitor)