Austrac sets out Westpac case on horrors of child abuse

Westpac is accused of ignoring for three years warnings from Austrac that suspected pedophiles were using its services.

Westpac is accused of ignoring for three years warnings from the fin­ancial intelligence watchdog that suspected pedophiles were using its services to ­funnel money to child exploitation providers in Asia.

In the final eight pages of a 47-page statement of claim, Austrac details the extent to which suspected pedophiles allegedly used the bank’s services, saying 3057 transactions worth ­almost $500,000 were made.

“By December 2016,” the statement says, “Austrac provided Westpac with methodology briefs detailing the key indicators for the purchase of live-streaming child exploitation ­material involving international funds transfers to The Philippines and Southeast Asia”. Despite this, it says, pedophiles allegedly continued to use Westpac’s services up to three months ago.

The most unsavoury accu­sations levelled at Westpac begin with the story of Customer One.

Austrac alleges that 625 transactions worth $136,000 were carried out by Customer One between November 2013 and July this year. Of these, Austrac alleges every transaction was “consistent with child exploitation typologies”; its statement of claim goes further, revealing in detail what Customer One was allegedly using Westpac’s services to pay for. “In October 2014 and November 2014, Customer One transferred money to a person located in The Philippines who was ­arrested in November 2015 for child trafficking and child exploitation involving live-streaming of child sex shows and offering children for sex.

“Had Westpac been ­appropriately monitoring for frequent low-value transactions consistent with child exploitation typologies in 2014, these trans­actions would have come to its ­attention.”

An alleged failure of compliance at Westpac meant every dollar transferred by the bank went undetected for almost six years; not only did Customer One transfer money to a person found guilty of live-streaming child sex, Austrac says, but the alleged ­offender twice travelled to the country where the acts were taking place. “Customer One’s ­account evidences he travelled to The Philippines in 2014 and 2016,” the statement of claim reads.

Each of the 12 cases identified in Austrac’s statement of claim shed light on Westpac’s alleged failure to flag the drip of money travelling from accounts owned by suspected pedophiles into the hands of child exploitation providers across Asia. In the case of Customer Two, Austrac alleges 991 transactions worth $43,000 were carried out between November 2013 and June this year using the Westpac low-cost LitePay platform, which ­allows users to send payments to people overseas.

Again, Austrac said every dollar spent by Customer Two was used to pay for child exploitation material and if appropriate detection scenarios had been in place, “the activity would have been identified earlier”.

The list of alleged crimes ends with Customer 12, who had held accounts with Westpac since 2016 and had a prior conviction for child ­exploitation offences.

Westpac allegedly became aware of Customer 12’s conviction on June 7 this year. Despite that, Customer 12 went on to send 10 transactions to The Philippines totalling $2612.

Austrac alleges the transfers were not subject to automated monitoring, despite the bank knowing Customer 12 had been convicted of child exploitation ­offences.