Organised crime groups rely on money laundering as a way of legitimising or hiding proceeds or instruments of crime. It blends criminal and legitimate activities, and stretches across areas as diverse as mainstream banking, gambling, shares and stocks, artwork, jewellery and real estate.
Money laundering is the common element in almost all serious and organised crime. It enables criminals to hide and accumulate wealth, avoid prosecution, evade taxes and fund further criminal activity.
The following strategies may be used by criminals to launder money:
- breaking up large amounts of cash and depositing it into bank accounts, or buying money orders or cheques and depositing them into other accounts in an effort to place money in the financial system without arousing suspicion
- moving money around to create complex money trails, making it difficult to identify its original source—usually through a series of quick transactions, or through businesses in other countries
- integrating money within the financial system for end use so it appears as legitimate funds or assets, and can include buying real estate and luxury assets, or investing in businesses
- using a number of people to carry out small transactions or smuggle cash into or out of the country
- using online gambling platforms, placing illegal proceeds of crime into gaming machines or purchasing casino chips and cashing them out shortly afterwards.
Money laundering can harm the Australian community in many ways, including:
- ‘crowding out’ legitimate businesses in the marketplace when businesses that are fronts for money laundering subsidise products and services so that they can sell them at levels well below market rates
- affecting the reputation and integrity of financial institutions when, usually without knowing, they become involved with the proceeds of illegal activity
- distorting investment patterns
- assisting in the financing of international and domestic terrorism
- financing and providing motivation for further criminal activities.