Commonwealth Bank of Australia Money Laundering Case

Table of Contents
CASE STUDY: Commonwealth Bank of Australia Money Laundering Case............................................3
INTRODUCTION:....................................................................................................................................3
CASE DESCRIPTION:...........................................................................................................................3
CASE ANALYSIS-.................................................................................................................................4
ANALYSIS-..........................................................................................................................................7
REFERENCE-...........................................................................................................................................8

CASE STUDY: Commonwealth Bank of Australia Money Laundering
Case
INTRODUCTION:
In most nations, money laundering is a severe felony. Continued participation of the financial
institution in this exercise raises issues about the magnitude of receiving penalty by banks and
whether the illegal action's payoff is higher than the penalty danger.
CASE DESCRIPTION:
In this case study we will discuss about the money laundering case of Commonwealth Bank of
Australia, other involved parties and how this case was dealt with.
Parties at Fault:
a. Commonwealth Bank of Australia- The Commonwealth Bank of Australia (CBA or
CommBank) was founded by the Commonwealth Bank Act in 1911 and shortly after activities
started in 1912. CBA was completely owned by the people before the privatization measures
started in April 1991. CBA was fully privatized by July 1996. Currently, CBA is a global
corporation with over 51,000 staff and 16.6 million clients in 11 nations, including the U.S.,
New Zealand, UK, Japan, and China. The institution had an overall revenue of almost 45

billion Australian dollars (A$) in 2017 with a net gain of A$ 9.88 billion (1 AUD equivalent to
$0.74). By measuring both enterprise value and total assets, CBA's total assets of A$ 976
billion in 2017 make it the biggest Australian business. (En.wikipedia.org, 2019)
b. AUSTRAC- the Australian Transaction Reports and Analysis Center (AUSTRAC) is the
Australian fiscal Intelligence service responsible for controlling funding for counter-money
laundering and curbing militancy (AML / CTF). The objective of AUSTRAC is to maintain the
transparency of the Australian economy and to assist manage accountability through its
skills in tackling money laundering and funding crime. Australian companies are needed to
submit financial transaction records and suspect information to AUSTRAC. Once AUSTRAC
has the company records that specialists utilize to evaluate the information and organize
reports on pecuniary information. The data are then circulated with other government
entities to assist combat financial fraud. (En.wikipedia.org, 2019)
One of the offenders using Australia's teller machines from the Commonwealth Bank to
embezzle the country's illegal drugs proceeds was Yuen Hong Fung. (Australian Financial
Review, 2019) Having opened CBA accounts with tens of false names, in June 2015, Mr
Fung–now in prison–made the utilization of '' Smart Payment Devices'' of the bank to pay
over $650,000 on the same day. This included the insertion into the devices of about 13,000
mostly $50 notes. Cash was produced from meth sales. It was transmitted to Hong Kong
accounts, as per the initial 583-page claim declaration submitted by AUSTRAC last August,
detailing Fung's actions along with similar organized felony organizations who also switched
to CBA to relocate their unlawful money.
As AUSTRAC and CBA recognized while announcing the resolution for situation as staggering
$700 million maximum fine was imposed on that day, "unlawful unions depend on
laundering unions to buy and sell their drugs" in addition to the cartels of illegal transfer of
cash were definitely drawn en route for the IDMs of CBA. When they were implemented by
the bank in May 2012, the first month of money savings amounted to $868,825. By end of
May that year, when CBA had set up 805 IDMs, money payments that passed across them
that month reached about $1.7 billion. The felons preferred the IDMs since, unlike earlier
ATMs, cash was immediately tallied into them and the sum of that money was
instantaneously credited to a CBA account. Funds for transfer, including global transfer,
were accessible instantly. The criminal gangs also enjoyed CBA as the financial institution
didn't have placed boundaries on the quantity that might be entered. This was till CBA
launched regular machine restrictions in that year (at the time of applying a $20,000 ceiling
on money transfers done to private CBA books using a CBA authorised card) and next year
(when adding a $10,000 ceiling on money transfers to CBA private and company books) that
AUSTRAC decided that the financial institution had "adequate danger-based checks to
minimize and handle" money laundering. "If CBA had previously implemented daily
restrictions, it would have interrupted money laundering exercise by cartels engaged in the
importing and dispersal of drugs, such as meth, through IDMs," the accepted facts
declaration said. "When daily constraints were not implemented, many million bucks of
laundering happened through CBA IDMs and some of the people engaged in the criminal
organizations laundering through IDMs were sued and sentenced of criminal activity." This
was noted by an observing supervisor at the Leichhardt Supermarket department of CBA, in