Terror finance fears spark remittance services store closures

Austrac has closed two Sydney remittance services providers, concerned they were vulnerable to being used to fund terrorism.

Austrac has closed Ghadir Group and Treasure Chest Trading following allegations of ongoing noncompliance with the anti-money laundering rules.

The anti-money laundering regulator has shut down two western Sydney-based remittance services shops owned by an Iraqi-Australian out of concern the non-compliant companies were vulnerable to being used to finance terrorism.

The regulator, Austrac, today cancelled the registrations of Ghadir Group and Treasure Chest Trading following allegations of ongoing noncompliance with the anti-money laundering rules, which it said was resulting in “unacceptable money laundering and terrorism financing risk”.

Documents held with the corporate regulator show Auburn resident Ahmad Alhamdani was the owner of both independent remittance providers.

Mr Alhamdani’s businesses allegedly failed repeatedly to meet the deadline for reporting transactions to the regulator and made false and misleading reports to Austrac, including reports relating to individuals with no association with their business.

“Remitters that do not take their obligations seriously pose a threat to the community by opening the door for criminals and terrorist groups to conceal and move money through the financial system,” said Austrac chief executive Nicole Rose.

“The remittance sector is a key part of Australia’s financial system, but it is also vulnerable to exploitation by criminals,” Ms Rose said.

“This supports crimes such as drug trafficking, child sex abuse and terrorist attacks. This is unacceptable and we will take action to remove this weakness in the financial system.”

It comes amid a more focused examination of remittance services by Austrac and the financial system. Hundreds of small businesses offering emittance service have been “de-banked” by one of the big four lenders since Austrac launched its landmark case against Commonwealth Bank last year, which resulted in a $700 million fine.

Commonwealth Bank accounts were allegedly used to launder nearly $2 million. Picture: AAP

Among other instances law enforcement agencies looked into concerning money being washed through CBA was a “cuckoo smurfing syndicate”

NSW Police’s Strike Force A1 run by a duo also in Auburn. Over an eight-month period the two men allegedly laundered $1,784,408, by making 255 separate deposits into 101 Commonwealth Bank accounts.

Austrac recently warned the financial sector it must ensure dodgy not-for-profit groups are prevented from financing terrorism, after a report found Australian charities were at risk of being used to wash money to be sent to high-risk areas, such as Islamic State-controlled parts of the Middle East.

The regulator is also ramping up its scrutiny of money flowing through pubs, clubs and casinos, and among real estate agents, lawyers and accountants.