Australians turned into money mules chasing crypto cash

Middle-aged Australians are being turned into “money mules” to convert cash raised by organised criminals into cryptocurrency so it can be moved out of the country via a record number of specialist ATMs springing up around the nation.

As the Australian Tax Office warns of a scam being used by substantially sized small businesses to de-fraud the GST system of millions of dollars, the agency charged with overseeing the integrity of the financial system has created its own taskforce to target digital currency exchanges and their cryptocurrency ATMs.

Crypto ATMs such as these are being used to launder money and scam Australian “money mules”.Credit: Janie Barrett

AUSTRAC believes some of the ATMs are being used by organisations based in South-East Asia to launder money from Australian-based organised criminals.

Over the past year, there has been a huge increase in crypto ATMs across the country, climbing from around 200 at the start of 2023 to more than 1200. Australia has the third-largest number of such ATMs in the world.

Australia is also home to 400 digital currency exchange providers. By contrast, Britain has just 40.

Between January and November last year, about $119 million of transactions went through 75 per cent of the crypto ATMs dotted across the country. Almost all were deposits, with the money converted into everything from Bitcoin to Tether and Dogecoin.

AUSTRAC chief executive officer Brendan Thomas said his agency had serious concerns about the amount of cash converted into cryptocurrency through the ATMs.

He said people in their 50s and 60s, having been hoodwinked into crypto investments, were often being persuaded by scammers to deposit cash into the machines, inadvertently becoming part of organised criminal networks that were using cryptocurrencies to launder profits. In some cases, they are losing their life savings.

“The worry is that we see these people who are scammed being coerced by the scammers into becoming money mules, moving money around these ATMs,” he said.

There has been a sharp rise in the number of people caught up in various scams, in part due to the recent surge in the value of cryptos. On Thursday, the price of Bitcoin went above $US100,000 for the first time, soaring by 50 per cent since Donald Trump’s election victory.

AUSTRAC will increase monitoring of crypto ATM providers while also taking legal action against those found to breach existing money laundering laws.

“We will take strong action. We’re warning these businesses that the penalties are larger than the profits they can make,” Thomas said.

“As the use of cryptocurrency increases, so too will criminal exploitation, which is why this taskforce
will work to eliminate non-compliant high-risk operations.”

It’s not just new forms of technology and payment systems that agencies are concerned about.

The ATO on Thursday warned of a growing number of business operators using the GST rebate system to boost their profits or keep their companies afloat.

The ATO is warning businesses engaging in GST fraud they will chase them down.

This year, the Tax Office revealed an estimated 57,000 people had been involved in a scheme, which started as videos on social media such as TikTok, that claimed participants could gain “free” cash from the ATO by handing over personal details.

Instead, the details were used to invent fake businesses with their own ABNs which were used to submit fake business activity estimates to claim GST refunds. About $1.2 billion was paid out in GST rebates while another $2.7 billion worth was stopped.

In the newest scam, well-established and “sophisticated” company operators are using inter-business transfers to claim GST rebates worth hundreds of thousands or millions of dollars. Obscure transactions are being made to disguise the actions of businesses seeking to inflate their GST rebates.

While scams such as this have existed previously, the ATO has detected a recent increase.

John Ford, ATO deputy commissioner and the head of the Serious Financial Crimes Taskforce, said those involved in such scams were trying to boost their own businesses or making personal purchases while disadvantaging legitimate taxpayers.

“We are targeting businesses who are participating in these schemes to ensure a level playing field for those who follow the rules,” he said.

“Not only is this behaviour putting honest businesses at risk, but it also takes funding away from vital community services such as hospitals, schools and transport.”

Fines can be 75 per cent of the tax that should have been paid while criminal charges can also be made against those caught defrauding the Commonwealth.

The Council of Financial Regulators, which includes the Reserve Bank, Treasury and the Australian Prudential Regulation Authority, on Thursday also noted that “geopolitical risk” was a growing concern and likely to dominate global affairs “for some time”.

“Heightened international tensions create the potential for adverse effects on the economy and financial system, including from cyber threats and conflicts,” it said in a statement.

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