Cocaine-smuggling grandparents use baby bank accounts to launder drug money

Cocaine-smuggling grandparents use baby bank accounts to launder drug money
The Daily Telegraph
December 23, 2008

Electronics Australian

Scam found ... cocaine-smuggling grandparents opened bank accounts in the names of their infant grandchildren to launder around $20 million

    * Cocaine-smuggling grandparents open accounts
    * Use names of their infant grandchildren
    * Scam revealed when money used to buy cars, property

COCAINE-smuggling grandparents opened bank accounts in the names of their infant grandchildren to launder around $20 million, it has been revealed.

But the scam came unstuck when investigators became suspicious after the accounts were used to buy luxury cars and property.

It was among the most elaborate financial scams of the year, uncovered by the country's anti-money laundering regulator, the Australian Transaction Reports and Analysis Centre.

"The amounts of money were very unusual for childrens' accounts," AusTRAC chief executive Neil Jensen said.

In another case, a sharp-eyed bank teller foiled a three-year-old $6.3 million crime after spotting a thief trying to launder what was - literally - dirty money.

The man had started digging up notes he had buried after scamming one ATM over four months using stolen credit cards and was depositing the $50 bills into his bank accounts.

The bank teller noticed the notes felt "washed" and "waxy".

Police arrested the man, charged him with money laundering and recovered $4.5 million in cash.

Legitimate businesses such as restaurants and grocers were used to transfer hundreds of thousands of dollars raised under the guise of charities to a terrorist organisation in South East Asia.

Others incidents included a Canadian crime syndicate which sent members to Australia to place skimming devices on ATMs to copy card details.

And lonely men were fleeced of up to $30,000 each after choosing Russian "brides" from a dating website.

They were asked for upfront payments for air tickets for the brides but the trick was discovered when AusTRAC tracked substantial sums of money being remitted to Russia, Bulgaria, Ukraine, Romania and Hungary.

Mr Jensen said that while scams were becoming more elaborate, cracking them often came down to the frontline troops, like bank tellers spotting what was suspicious.

There were more than 20 million transactions reported to AusTRAC in 2008, including an increase of 20 per cent in the number of suspected illegal transactions.

Every wire transfer of money in and out of the country and nearly 3 million transactions involving $10,000 or more were also notified.

Over five weeks in July and August, the Australian Federal Police and Customs working with AusTRAC charged 37 people with 87 charges and stopped 14.6 tonnes of drugs with a street value of $3billion from being distributed.