Financial crimes watchdog AUSTRAC is under fire. Picture: Supplied
Financial crimes watchdog AUSTRAC is under fire. Picture: Supplied

‘Hopeless’: AUSTRAC slammed over alleged Westpac failures

Exclusive: Financial crimes watchdog AUSTRAC has been labelled as "hopeless" after a series of missteps and its legal action against Westpac alleging it breached anti-money laundering laws 23 million times and gave a free pass to 12 bank customers potentially committing child sex crimes, resulted in just one person being charged.

The revelation of the single charge comes six months after Austrac referred the customers to the Australian Federal Police to investigate, and as the case against the bank, which self-reported the breaches, heads back to court this week.

News Corp can reveal two of the 12 bank customers outed by AUSTRAC have been cleared of any wrong doing.

But questions have been raised about what has happened to the remaining nine - whether they were also innocent of any wrong doing? Or had been tipped off in time by AUSTRAC's public revelations to destroy evidence or skip the country.

AUSTRAC has refused to comment on the Westpac case saying it is not "appropriate" while it is before the courts.

 

Financial crimes watchdog Austrac has been labelled as “hopeless” after legal action against Westpac over alleged breaches of anti-money laundering laws resulted in just one person being charged. Picture: Getty Images
Financial crimes watchdog Austrac has been labelled as “hopeless” after legal action against Westpac over alleged breaches of anti-money laundering laws resulted in just one person being charged. Picture: Getty Images

 

Dr Ron Pol, a lawyer and anti-money laundering expert, said the breathless reporting surrounding the "clickbait of 23 million breaches" failed to consider how AUSTRAC had in the first place "overlooked a glaring gap in the number of reports it should have received" from Westpac Bank.

Dr Pol said it was symptomatic of a compliance culture which measures activity rather than results and the "less exciting truth" is that AUSTRAC's claim against the bank lists less than a dozen types of breach.

But the watchdog is facing mounting criticisms about its seeming failures to act on suspicious matter reports ranging from millions of dollars in an alleged gold refinery money laundering scam, to video evidence of a shopping bag full of money allegedly being laundered at Crown casino, and a failure to efficiently oversee Clubs NSW.

Industry experts have also called out the watchdog for failing to publish - since 2014 - important typology reports warning and informing industry and the wider community about the various methods criminals use to conceal, launder or move illicit funds and to commit financial or other crimes.

Independent Federal MP, Andrew Wilkie, said "in my experience AUSTRAC's conduct has been hopeless."

"On a number of occasions I have provided AUSTRAC with hard evidence of money laundering and other criminal activities, and every time they have ignored the evidence or obfuscated with bureaucratic gobbledygook."

"The bottoms line is that AUSTRAC is useless. It needs to be either replaced or genuinely fixed, because right now it gives Australians a false sense of security."

AUSTRAC is also facing questions after confirming to Senator Rex Patrick in Senate Estimates hearings the watchdog had either set up an internal committee or formed team to review how AUSTRAC had missed Westpac's noncompliance.

A follow-up Freedom of Information request from News Corp has revealed AUSTRAC holds no documents to back up that statement.

Senator Patrick said the FOI results seem inconsistent with the evidence given to the Senate Legal and Constitutional Committee and he will be seeking an explanation.

"It is an issue I will be taking up with the Committee," he said.

An AUSTRAC spokeswoman said it "has existing systems in place to identify noncompliance and will not hesitate to take enforcement action where noncompliance is identified.

AUSTRAC refutes any claim that AUSTRAC's approach to regulation requires additional internal inquiry or review."

Originally published as 'Hopeless': AUSTRAC slammed over alleged Westpac failures



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