Commonwealth Bank money-laundering scandal: Watchdog claims CBA ‘ignored’ gun, drug-tainted cash

DRUG and firearm dealers used Commonwealth Bank ATMs to launder almost $42 million, Australia’s dirty-money watchdog has claimed.

DRUG and firearm dealers used Commonwealth Bank ATMs to launder almost $42 million, Australia’s dirty-money watchdog has claimed.

And the bank failed to properly monitor the account of a convicted terrorist from Lebanon even after concerns about his history were flagged, the regulator says.

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The Australian Transaction Reports and Analysis Centre has made the explosive allegations in an expanded statement of claim against the CBA filed on Thursday in the Federal Court. It has lifted the number of alleged contraventions of anti-money-laundering laws by 100.

The watchdog, more commonly known as Austrac, said it identified the extra issues after launching its legal action against the bank in August.

They bring the number of contraventions levelled against the bank to more than 53,800.

The maximum penalty for each alleged contravention in the amended statement of claim is $21 million.

“These allegations are very serious and reflect systemic noncompliance over approximately six years,” Austrac chief Nicole Rose said on Thursday.

The CBA late on Wednesday conceded it had failed to report to regulators suspicious transactions carried out through its ATMs, but vowed to fight many of Austrac’s earlier claims.

The bank on Thursday said it was reviewing the new claims.

Of the new alleged breaches, 86 relate to an arrest by New South Wales police in January of a person they claim led a money-laundering syndicate.

Drugs and firearm dealers used Commonwealth Bank ATMs to launder almost $42 million, Australia’s dirty-money watchdog has claimed. Picture: Ian Waldie/Bloomberg News

Of these, 52 relate to the bank failing to lodge so-called suspicious matter reports, and 34 relate to failing to lodge customer due-diligence reports.

Austrac alleges the supposed ringleader “directed Australian nationals — the money mules — to meet with members of organised crime groups to collect large sums of money to launder out of Australia”.

It alleges the drug and firearm syndicate laundered almost $42 million between March 2016 and August 2016 using CBA machines.

In another claim, Austrac alleges the bank twice failed in its customer due-diligence requirements and makes two charges of breaching rules on reporting suspicious transactions.

Those charges relate to transfers attempted by brothers from Lebanon, one of whom is a convicted terrorist.

In 2005, one of the brothers “was convicted to three years’ imprisonment in Lebanon for ... terrorism-related offences”, Austrac says.

It alleges that on July 20 this year, the bank “erroneously” processed a transfer of $5000, “in spite of suspecting terrorism financing”. On the same day, the error was identified and the payment was cancelled, Austrac claims.

A hold was allegedly placed on the account in August 9 this year — a week after the first Austrac claims were raised with the CBA — but $6225 was still withdrawn from it from Sydney’s Bankstown Central branch on August 18, according to documents.