Parallels between Trio and bank money laundering

The Victims of Financial Fraud (VOFF) group has drawn parallels between the recent money laundering investigations against the banks and the Trio Capital scheme, arguing the “scapegoating” and “victimisation” used against Trio cannot be repeated in the current money laundering cases.

In a statement, the group said there were discrepancies in the way the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act was administered, and said it feared another double standard existed in the way financial fraud was investigated depending on whether the fraud was against ordinary citizens or the Commonwealth.

The group quoted a former AUSTRAC senior adviser, who said banks and other financial institutions that failed to conduct basic due diligence likely placed them in breach of “know your customer” requirements. The adviser also said a criminal could create a company and bounce all the money into one account and then send it offshore and walk away from the company.

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VOFF asked why investors or superannuation account holders were not warned about weaknesses if authorities had known about the weak laws and questionable banking practices that enabled criminals to move millions of dollars through Australian banks.

“The allegations about the CBA’s ATM money transactions is a reminder of the Trio Capital

Limited scheme where a criminal gang took over a reputable funds management business and transferred investor’s money to destinations only known to the criminals,” the group said.

VOFF quoted the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into the collapse of Trio Capital from May 2012, which said “the custodian (in Trio's case, the National Australia Bank) does very little to protect the funds of investors. It makes no independent checks before transferring money offshore. Instead, the custodian simply acts on the instructions of the responsible entity”.

“Seemingly the discrepancies in applying the AML/CTF Act and the admission about the weaknesses in the financial system would suggest it’s time the Trio victims receive an apology, compensation and be vindicated for the crime that financial regulatory agencies should have expected.”

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