Australian jihadis have drawn on superannuation funds to help finance terror groups in the Middle East

AUSTRALIAN jihadis have drawn on their superannuation funds to help finance their activities with terror groups in the Middle East.

About 110 Australian are currently fighting or engaged with terrorist groups in Syria and Iraq. AFP/JOSEPH EID

AUSTRALIAN jihadis have drawn on their superannuation funds to help finance their activities with terror groups in the Middle East.

A probe into money laundering and terrorism financing in Australia’s superannuation sector has revealed nine funds reported 19 suspicious cases to authorities in the past two years because of likely links to foreign fighters.

Commonwealth finance intelligence agency AUSTRAC also found a range of other criminal activities in the sector, including potential tax evasion, unusually large transfers and unauthorised account transactions.

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It found evidence that some foreign fighters had rolled over payments from APRA-regulated accounts to self-managed funds by claiming financial hardship provisions, with the money ultimately being used for terrorism financing.

Foreign fighters may also have been supported by family or others in their community who had accessed their superannuation savings legitimately.

About 110 Australian are currently fighting or engaged with terrorist groups in Syria and Iraq, with another 200 people at home under investigation right now for providing support to individuals and groups, including through funding and facilitation, or who are themselves seeking to travel.

As many as 68 Australians are believed to have been killed in the area in the past four years.

Suspicious cases were most frequently reported by super funds as a result of a person’s name appearing in media reports of Australian foreign fighters or in relation to counter-terrorism operations.

They led authorities to identify and freeze assets of those fighting unlawfully in overseas conflicts.

The report, released on Monday, rated terrorism financing a “limited but emerging threat” for the industry, with the cases relating to amounts worth $259,790 in total.

Unprecedented technological changes in the financial sector — including the superannuation — has left it vulnerability to criminality, the report found.

The size of Australia’s super industry — with more than 240 funds holding $1.26 trillion in 28 million funds — has made it an attractive target for money laundering and associated predicate crimes.

The criminal threats to the industry ranging from opportunistic offences conducted by individual members, to complex and sophisticated attacks executed by organised crime groups, including from entities based overseas.

While fraud was by far the most commonly identified crime affecting super fund, cybercrime was identified as a key growing threat, with some super funds seeing almost daily attempts to hack accounts for information or funds access.

There were also many reported cases of falsified documents and attempted illegal early release of superannuation savings.

Justice Minister Michael Keenan said the investigation was a clear demonstration that the sector was aware of the criminal risks and was working with AUSTRAC to ensure the security of the superannuation system.

“Better awareness means better reporting and, in turn, that means better financial intelligence to help crack down on criminals wanting to exploit others for their own gain,” Mr Keenan said.