Bags of cash, how money launderers used CBA
SYDNEY: In a run- down mall in one of Sydney’s biggest Chinese neighbourhoods in 2015, 29-yearold Jizhang Lu showed up at the top-floor offices of a meat export company carrying a carrier bag stuffed with hundreds of thousands of dollars in cash.
According to police documents filed in court and reviewed by Reuters, Lu said he made the trip to the shopfront of CC& B International Pty Ltd eight times over three weeks. Each time a CC& B employee would hand him a receipt showing a different company had bought tens of thousands of kilogrammes of meat.
The cash - as much as A$ 530,200 ( US$ 416,840) at a time - was then deposited at a Commonwealth Bank of Australia (CBA) branch, according to the police statement of facts agreed by Lu.
But the apparent purchases were fake, and last year Lu was jailed for two years after pleading guilty to helping launder A$ 3.2 million of what police allege were proceeds from an unidentified international drug syndicate.
The court records reviewed by Reuters did not name Lu’s lawyer. Lu could not immediately be con- tacted directly because he was in custody. The police case against Lu is now one of several being cited by financial intelligence agency AUSTRAC in its statement of claim against CBA, the largest civil court action of its kind in Australian corporate history.
AUSTRAC has accused CBA of “serious and systemic” breaches of money-laundering and counterterrorism financing rules, alleging the country’s second biggest mortgage lender failed to detect suspicious transactions nearly 54,000 times. It faces fines potentially amounting to billions of dollars.
CBA has said it will fight the AUSTRAC lawsuit, saying it would never deliberately undertake action that enables any form of crime. CBA said a coding error with new automated teller machines was behind most of the breaches but that it recognised there were “other serious allegations” in AUSTRAC’s claim were unrelated to that software problem. It declined to comment specifically about the police case against Lu.
AUSTRAC’s lawsuit against CBA asserts that, in total, A$ 17.7 million was deposited at the bank from February to August 2015 on behalf of a company identified in the earlier criminal case as CC& B.
“These funds were the proceeds of a drug importation syndicate and were proceeds of crime, within the meaning of the Criminal Code Act,” AUSTRAC’s statement of claim says, referring to CC& B only as Company 1. — Reuters