Four arrested in Bendigo Bank money laundering probe at Melbourne branch

A suburban Melbourne branch at the heart of Bendigo Bank’s money laundering troubles has been shut down as police confirm four people were arrested.

The branch in Mount Waverley abruptly closed just a week after four people were arrested as part of an ongoing investigation. Picture: Elke Meitzel

Four people have been arrested as part of an investigation into alleged money laundering after Bendigo and Adelaide Bank discovered suspicious transactions at one of its community branches.

The regional lender dropped a bombshell on the market last week when it revealed an independent report conducted by Deloitte had discovered widespread weaknesses in its systems designed to detect and prevent money laundering and terrorism financing.

The review detected suspicious activity at one of its branches dating back as far as August 2019.

The bank refused to reveal the branch in question but The Australian can reveal it was a community branch in suburban Melbourne, which abruptly closed just a week after four people were arrested as part of an ongoing investigation.

Around 280 of Bendigo’s 400-odd branches are community branches. These are franchise-style partnerships owned and run by local community organisations.

Bendigo discovered “suspicious activity indicative of money laundering” at the Pinewood Community Branch in Mount Waverley, in Melbourne’s southeast, in August. In addition to commissioning the Deloitte review, it alerted the police and the financial crimes regulator, Austrac.

A spokesperson for Victoria Police said that detectives from the Criminal Proceeds Squad arrested four people on September 2 as part of an investigation into alleged money laundering.

“A 35-year-old Mount Waverley woman, a 23-year-old Vermont South man, a 56-year-old Mount Waverley man and a 45-year-old Point Cook man were interviewed in relation to the Commonwealth offence of dealing property suspected to be proceeds of crime,” the spokesperson said.

All four were released pending further investigation. “Police are working closely with Bendigo Bank as part of this investigation,” the spokesperson added.

“As the matter is ongoing, it would be inappropriate to comment further at this time.”

The closed branch site for lease, Picture: Elke Meitzel

Bendigo Bank chief Richard Fennell. Picture: Jane Dempster

The community branch was run by the Pinewood Community Financial Services Limited group, which reported a half-year profit after tax of almost $250,000 in December 2024.

Pinewood’s chairman and managing director Robert Davies wrote to shareholders on September 9 to reveal that the branch had been “required to temporarily suspend its operations” and “remain closed for further notice”.

No explanation was provided. A short time later, shareholders were informed that the franchise agreement between Bendigo and Pinewood had ended.

Mr Davies did not respond to multiple requests for comment. There is no suggestion that anyone at Pinewood was involved in the alleged money laundering.

It comes after Bendigo Bank held its investor day in Sydney on Thursday, when CEO Richard Fennell conceded to investors the lender had “fallen short” on anti-money laundering controls.

He said work to improve financial controls would not dominate the bank in the years ahead, but would be a focus.

“We expect this is going to be a pretty significant project that’s going to need a fair bit of focus,” he said.

Mr Fennell insisted the bank’s 28-year-old community branch model was not a risk factor.

“We have not done a review of all branches and all transactions,” he said. “There’s not been a particular skew of community banks versus company-owned branches from a risk perspective.”

Mr Fennell declined to confirm whether the Pinewood branch was the source of the problem when it was put to him on Thursday.

“As I said before with legal activity under way there are certain things we can and can’t say. We’re not at the moment in a position to identify the branch that was the source of those transactions,” he said.

Bendigo Bank’s board previously said it was “very disappointed” with Deloitte’s findings and has committed to fixing all the problems to ensure it is compliant with the law.

“While the final outcomes (including costs) are unknown at this stage, the bank will keep the market informed in line with its continuous disclosure obligations,” the statement added.

The announcement prompted an 8.6 per cent dive in Bendigo’s share price, its worst day since mid-February.

A spokesman for Austrac said it had “been engaging with Bendigo Bank in relation to the matter, and is considering what, if any, regulatory action is appropriate”.

“As the matter is ongoing, it would not be appropriate for Austrac to comment further at this time,” the spokesman added.

Do you know more? Contact [e-mail]

Originally published as Four arrested in Bendigo Bank money laundering probe at Melbourne branch