Money launderers use Commonwealth Bank of Australia

REUTERS
SYDNEY
Published

In a run-down mall in one of Sydney's biggest Chinese neighbourhoods in 2015, 29-year-old Jizhang Lu showed up at the top-floor offices of a meat export company carrying a carrier bag stuffed with hundreds of thousands of dollars in cash. According to police documents filed in court and reviewed by Reuters, Lu said he made the trip to the shopfront of CC&B International Pty Ltd eight times over three weeks. Each time a CC&B employee would hand him a receipt showing a different company had bought tens of thousands of kilograms of meat. The cash - as much as A$530,200 ($416,840) at a time - was then deposited at a Commonwealth Bank of Australia (CBA) branch, according to the police statement of facts agreed by Lu. But the apparent purchases were fake, and last year Lu was jailed for two years after pleading guilty to helping launder A$3.2 million of what police allege were proceeds from an unidentified international drug syndicate. The police case against Lu is now one of several being cited by financial intelligence agency AUSTRAC in its statement of claim against CBA, the largest civil court action of its kind in Australian corporate history. AUSTRAC has accused CBA of "serious and systemic" breaches of money-laundering and counter-terrorism financing rules, alleging the country's second biggest mortgage lender failed to detect suspicious transactions nearly 54,000 times. It faces fines potentially amounting to billions of dollars.

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