CBA branch laundered $27.2 million for criminal drug gang, court told
The Australian 12:00am August 11, 2017
Nicola Berkovic
Members of a criminal gang involved with the manufacture and importation of liquid methamphetamine would deliver bags of cash to a fake business at the Lemon Grove Shopping Centre in Chatswood, on Sydney’s north shore, and get “receipts” for meat, including “mutton leg”, “lamb leg bones” and “tongue long cut”.
“Staff members” of the fake business, known in court documents as Company 1, would then take the bags and deposit the cash into its account at the CBA’s Chatswood branch.
On one occasion $527,900 was lugged to the bank in a black and blue sports bag. Another time $529,900 was loaded into a blue Aldi shopping bag.
Chinese man Jizhang Lu, jailed for a maximum of two years, delivered $3.2 million over a period of just under three weeks.
In total, $27.2m was deposited by the syndicate into CBA bank accounts between November 2014 and August 2015, almost all of which was spirited offshore.
The allegations form part a widening CBA money-laundering scandal, which has seen chief executive Ian Narev fighting to defend the bank’s reputation.
The CBA, which this week posted a $9.9 billion profit, has been accused by the Australian Transaction Reports and Analysis Centre of 53,700 breaches of money-laundering and terror-financing laws. Each breach carries an $18m maximum fine. On August 7, Chatswood branch staff raised the alarm about two Asian males and one Asian female making “very large cash deposits very regularly”.
The bank’s AML team notified Austrac on August 13, but, according to court documents, the bank closed the alerts and did not carry out further customer due diligence. The CBA had determined by at least April 2015 that the account held in the name of Company 1 was “high risk and suspicious”. By April, when the bank made its first notification to Austrac, $14.7m had already been transferred offshore.
According to Austrac, the bank did not monitor Company 1 and allowed the “highly suspicious activity to continue”. Although suspicious cash deposits and international transfers were occurring almost daily, the regulator was notified about only every three months.
It was not until August 26, 2015 that the CBA finally put a stop on the account, in response to an order by the NSW Supreme Court. On October 21, 2015 it sent Company 1 a letter giving it 30 days notice of its intention to terminate the account, but a year later the account was not closed.
Lu used a BlackBerry to communicate with other members of the gang about “eating beef” under the pseudonym “Longshot8”, and took instructions from “Master”.