COMMONWEALTH BANK ACCUSED OF MONEY-LAUNDERING BREACHES
Country’s No. 1 lender accused of failing to report suspicious transactions totalling A$77m
THE government yesterday accused the country's biggest mortgage lender, Commonwealth Bank of Australia (CommBank), of widespread breaches of money-laundering and counter-terrorism financing rules.
Financial intelligence agency Austrac said it had initiated civil penalty proceedings in the Federal Court against CommBank for “serious and systemic noncompliance”, in the biggest case of its kind in Australia and the first against a major bank.
CommBank said in a statement it was reviewing the allegations and would respond “in due course”.
Australia’s biggest mortgage lender failed to report suspicious matters “either on time or at all involving transactions totalling over A$77 million (RM261.6 million)”, said Austrac.
The agency alleged 53,700 contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act, particularly with regards to so-called intelligent deposit machines (IDMs).
The previous biggest such case came against Australia’s top bookmaker Tabcorp Holdings, earlier this year, with only 108 alleged breaches.
Tabcorp paid A$45 million in fines, the biggest civil penalty in Australian corporate history.
The maximum penalty for contravening the anti-money laundering and counter terrorism financing law is A$18 million per breach.
IDMs are a type of automated teller machine that accepts deposits by both cash and cheque, and facilitate anonymous cash deposits.
There had been significant growth in the use of CommBank’s IDMs since their rollout in May 2012, said Austrac.
Cash deposits in the six months to June last year surged to A$5.8 billion compared with A$89 million in the first six months after CommBank introduced the machines.
Cash was deposited using fake names with proceeds going to drug importation syndicates, Austrac alleges in its filings.
CommBank accounts were also used for “cuckoo smurfing”, a form of money laundering which involves transfers between countries without the need for money to actually cross international borders, Austrac added. Reuters
A man using a Commonwealth Bank automated teller machine in Sydney. The bank has been accused of ‘serious and systemic noncompliance’ of anti-money laundering and counter-terrorism financing laws.