Remember in the old movies when you did something bad you were threatened with being sent to the Siberian salt mines? How times have changed. A mysterious bunch of couples from Siberia came to the Gold Coast a few years back for a so called holiday and opened up dozens of bank accounts. 30 million dollars in overseas deposits later and wild spending sprees drew the attention the law enforcement here concentrating on Money Laundering.
Mmmmm so where did the cash come from, as most had modest incomes according to their applications. I would be guessing DRUGS. I really hope the application to confiscate the money on proceeds of crime is SUCCESSFUL.
WHO ARE THESE PEOPLE AND WHY DID THEY COME? ARE WE AN EASY TARGET? IT SEEMS SO
Court battle looms over Russians’ mysterious $30 million fortune in Australian accounts
By David Lewis
The Australian Federal Police (AFP) will move next month to confiscate nearly $30 million, frozen in Queensland bank accounts, belonging to nine Russian nationals.
The Russians claim to be wealthy businesspeople but the AFP argues their fortune is “entirely incompatible” with their modest income and there is reasonable grounds to suspect the money is the proceeds of crime.
A forfeiture order will be lodged with the District Court on June 18 and if the AFP is successful, it would be the largest ever seizure of alleged dirty money in a case involving no criminal charges.
Dr David Chaikin, a banking and financial law expert from Sydney University, says the Russians are no longer in Australia and will have to explain themselves through their lawyers.
“What’s been alleged is that the Russians engaged in money laundering and used Australian bank accounts through which to launder it,” he told the ABC’s 7.30 program.
“If the Russians do not prove this money is legitimate, then Australia will get a $30 million bounty.”
According to a police affidavit submitted as evidence, the nine Russians made six trips to Queensland’s Gold Coast between December 2010 and March 2013.
The group, which includes three married couples, opened bank accounts with the ANZ in Surfers Paradise each time.
The balance of each of those accounts grew suddenly thanks to a series of international money transfers from eight foreign companies with bank accounts in Hong Kong and mainland China.
By December 2013, the Russians had opened 24 bank accounts and their combined fortune had reached a staggering $29,250,681.74.
A life of luxury ‘incompatible’ with modest income
Bank account transaction records reveal the Russians like to shop and have expensive tastes with more than $1 million spent on fashion, jewellery and overseas holidays.
The group bought $287,271 worth of designer clothing from Oscar Collezioni and $127,666 at Swiss jewellery store Bucherer.
They also spent $91,531 on flights to Italy, Switzerland, Dubai, Thailand and Australia, where they visited the Great Barrier Reef and the Gold Coast.
The police affidavit states this extravagant lifestyle is “entirely incompatible with the declared income of the nine Russians”.
According to their tourist visas, the Russians earn between $11,000 and $65,000 per year.
Dr Chaikin says that discrepancy would have caused Australian authorities to become extremely suspicious.
“If you’re earning less than $100,000 and you’re bringing in $30 million, that doesn’t make any sense at all,” he said.
The AFP says the Russians are from Irkutsk, one of the largest cities in Siberia.
Their visas suggest seven of them work for Baikalquartzsamotsvety JSC, a company specialising in mining precious stones.
The law firm representing the group, Doyle Wilson Solicitors, has provided the ABC with a statement.
“None of them have any criminal record in Australia, Russia, or elsewhere,” it reads.
“They are legitimate businessmen involved in the mining industry and the food processing industry in Russia and other countries.
“They travelled to Australia on a number of occasions between 2010 and 2013, including on some occasions with their children, for regular tourist activities, and not only for the purpose of opening bank accounts.
“They intent to defend vigorously the civil proceedings brought against them in the District Court of Queensland.”
A court order requires the Russians to provide sworn statements explaining how they obtained their wealth but Doyle Wilson Solicitors has appealed the order on legal grounds.
Australia’s anti-money laundering laws up for review
If the AFP wins the court case, Dr Chaikin says the victory would provide a timely boost to the reputation of federal law enforcement agencies.
“This year, Australia is being subject to a review of its anti-money laundering laws and procedures by the Financial Action Task Force (FATF),” he said.
“This case will assist Australia’s claim that it is effectively enforcing its anti-money laundering laws.”
Criminologist John Walker says while confiscating $30 million would undoubtedly be a victory for authorities, the figure is a drop in the ocean.
“There is so much money that escapes, that gets through the net,” he told 7.30.
Mr Walker has previously worked for the United Nations and the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s anti-money laundering organisation.
He says it is dead easy to launder money and get away with it.
“[Australia is] actually a very good place to launder money,” he said.
“That’s not because there are deficiencies with what AUSTRAC does. It’s because this is such a good place to invest.
“If you make your transactions look legitimate the banks and law enforcement agencies are not going to raise suspicions.”
Australian banks are required by law to report every international money transfer to AUSTRAC.
Dr Chaikin argues more could be done with that information.
“Our record on collection of financial intelligence is second to none in the world,” he said.
“The issue really is to what extent do we use that intelligence and the investigative skills of the AFP and other law enforcement agencies to effectively enforce anti-money laundering laws.
“In that respect, our record is not so good.”