Money Laundering for Dummies

The bit I don’t get with the whole CBA money laundering through ATMs is why?

The fees are so small.

If you are going to launder money you need to: (1) take a hefty fee (10-15% should be an absolute minimum); and (2) obtain leverage over the criminal for future use.

Macrobusiness has numerous times (see herehere and here as examples) covered how the Australian property market is considered a hotspot for stolen money and that the Australian government has ignored the recommendations to put anti-money laundering procedures in place for Australian property.

CBA officials should take note of the Australian Government’s approach to property for a master class in how to launder money effectively.

First, you need to get your fee. Yesterday, Domain cut some of the numbers for us:

On a $5 million property, that cost blows out an extra $770,499 for foreign buyers, according to Shane Garrett, senior economist at the Housing Industry Association.

The extra costs include an additional $690,490 stamp duty surcharge, the annual ongoing $70,500 in additional land tax and the $10,000 FIRB application fee.

And also

In the case of last November’s $60.66 million sale of luxury car importer Neville Crichton’s Point Piper home through Brad Pillinger and Bart Doff, the FIRB-approved buyer would have had to pay $600,000 just to seek permission to buy it.

Next you have the leverage:

“Hi [name redacted], it’s me [name redacted] again, I’m your parliamentary representative from the [name redacted] Party.

Just wanted to call you to let you know about a few upcoming pieces of legislation that we are considering that might affect you. That pesky anti-money laundering legislation is back, it could prevent you getting the rest of your money over to Australia. Also, considering you are up to 5 houses now, I should remind you that we are getting a bit of pressure on these empty house taxes – that could really set you back some dosh if that manages to get through.

I should also remind you about that special task force to investigate purchases by foreigners. It is almost like the Treasurer is judge, jury and executioner on this one. I know, amazing isn’t it – that kind of legal setup must make you feel like you never left China! Ha ha.

Anyway, just letting you know that we aren’t looking at your purchases. At the moment.

So, with the official side of the call out of the way, let’s switch hats. I should make clear that this next conversation has nothing to do with the stuff I just mentioned. Really, I mean it. Nothing to do with what we just mentioned.

First, I wanted to talk about the new China/Australia think tank we are starting and see if you wanted to contribute? What’s that? No, no, it won’t be expensive to run – most of the money will go straight to the ex-politicians. Bloody Sam Dastyari ruined it for current politicians. The only other cost will be a few translators to transcribe the thought papers from Chinese into English. Then, we really need to discuss the next election, it is coming up wanted to see if you could find it in your heart for a donation?”

Then, we really need to discuss the next election, it is coming up wanted to see if you could find it in your heart for a donation?”

CBA money laundering?

Pfffft. Amateurs.

The officially sanctioned path for laundered money in this country is through property. Let’s hope the fine levied on CBA is large enough that the CBA execs don’t forget it.

Damien Klassen is Chief Investment Officer at the Macrobusiness Fund, which is powered by Nucleus Wealth.

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Damien Klassen is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Integrity Private Wealth Pty Ltd, AFSL 436298.

 

Comments

    • Maybe Damien is Reusa and he’s just going to put everyone’s money into the only fool proof investment in the cosmos, Australian housing.

  1. You may have missed it.

    For people to get their money into the country from China, or into an Australian bank account in order to buy the property – CBA – ATM cash laundromat.

    From there – buy property.

    Comm Bank was facilitating the Chinese laundering process – gives a whole new meaning to Chinese Laundromat.

    .

    • C.M.BurnsMEMBER

      wasn’t most of the money getting wired back to accounts in Hong Kong ? Seems a weird destination for it if it’s goal is to buy property.

      Money going into Australian property by the chinese has already been laundered – it’s a necessary part of the process of getting it out of china via hong kong or other channels.

      This money must have had a local origin – likely drugs or other black market activity and was being laundered prior to being sent back overseas. I’m pretty sure that I read that it was drug trade investigations that led law enforcement to discover the role that CBA’s ATM network was playing in the overall process

      • ErmingtonPlumbing

        Maybe it’s a way for Chinese “property investors” to avoid Chinese government scrunity of their cash flows through Chinese banks.

        The money coming into HK (from OZ), can be made to look like incoming export earnings from OS, which they can then use to secure property loans from one of the big 4 Australian banks, which all have branches in HK.

        I have a family member in a high up position, in one of the big 4, in HK,…and he tells me that the only reason his bank is there,… is to facilitate Australian Property purchasing by Chinese Nationals

      • @ ermoplumber , if you have a relo high up that is facilitating money laundering into Australian property then surely you should be reporting these cockhead non Australian fuckwits to the relevant authorities. You call your self blue collar ALP but sounds like you couldn’t give a rats arse about the rorts brother.
        Done active service for my country, but wish I could take it back because of fuckwits like you’re family member that us selling my kids out brother. You talk the talk , but have you ever held a loaded rifle in your hands with enemy in tow? Did it for kids and country! Not just my kids, but yours as well all to get sold out with slave Labour money. Stop wasting your time with bullshit ALP . Sellouts

      • ErmingtonPlumbing

        If I had my way T, I’d outlaw foreign ownership and control of ANY kind of Residential property, Farmland or Natural resource in our Country.

        But I don’t have this “my way” do I,…the law states these things can be “Owned” by foreign non citizens and athough I think it regrettable thst my family member is helping to facilitate this phenomenon that is pricing Australians out of their own Country,…he is not really breaking any laws as far as I can tell.
        So what is there to Report?,…that we are all being sold out to Global Plutocracy,…I try and do that every day and I think within the ALP this message has the best chance to gain REAL long term traction,…a traction based a responsibility to the Working Class,….not just some isolated policy platitude, to those Pissed of they can’t buy a house where they want to, or are pissed off that brown people are moving into the area they do own in.

        If you want representation for Australian working people,…then you need a people’s party,…its never been any different,..anywhere,…at anytime.

        The embrace of ridiculously over the top, Political correctness and Identity Politics is by design,…a design who’s purpose is to alienate you from YOUR and MY people’s party,…. the Plutocrats love the divisiveness of it all,… because it prevents Working people from demanding and taking REAL POWER for themselves, by breaking the essential component required for Working Class representation and Victory,…. Solidarity.

      • @T – Australia has been at peace for quite some time now. If you’d just said “held a rifle in the service of my country” it wouldn’t sound odd, but “held a rifle with enemy in tow”, well now I wanna know who our enemy was. Was it Koreans trying to take back their country from foreign interests? Was it Vietnamese trying to do the same? Was it an Iraqi who had no navy capable of reaching Australia in the first place?

        I don’t make it a habit to start arguments with servicemen on this topic, but when they’re trying to use their service to shut down another individual over not dobbing in their brother for an activity that our highest levels of government are clearly in favour of, then I feel the need to maybe investigate whether what that serviceman did is really the moral high ground.

  2. So how should the sanction be calculated? 1. Proceeds of crime + punitive sum + costs. 2. Open to class action of victims at the extreme end of nexus. Common law is scarily powerful in these circumstances.

    • But for the CBA there is negligible proceeds/ revenue and ultimately there is no victim.

      So punishment is the only recourse.

    • Tabcorp was fined $45 million for 108 violations of the AML/CTF Act, including failure to lodge 105 suspicious activity reports on time.

      They didn’t even identify the facilitation of criminal activity with Tabcorp, just sloppy AML CTF work..

  3. Amusing coverage of the Ibrahim arrests in Dubai by Fairfax yday. Paragraphs about Dubai being an easy pkace for criminals to launder money in real estate. No mention of a similar situation existing in Australia in the article.

    • And amusingly Ibrahim seems to have paid cash for lots of property. The house on the cliff at Dover Heights looks great, before the police removed the walls.

  4. What is unclear to me is step 1 – how the money gets into Australia in the first place?

    Is it by false invoicing from China? It can’t all be sales of drugs?

    • With all those iron clad capital controls, gee what a mystery! They couldn’t all be supplying personal care products to the hotels industry* could they?

      * widespread code for Government official on the take.

  5. the proceeds of the Meth trade, proudly laundered by Ian Narev and the CBA! Now that’s diversification for you, just when property looks like a bubble, diversification is at the top of the boardroom agenda