Keynote address to the Trans-Tasman Business Circle

Introduction and background of the ACC

Good afternoon

Thank you to the Trans-Tasman Business Circle for inviting me to speak here today.  

It is great to be part of an event focused on the sharing of ideas and information across business and government.

As the Chief Executive Officer of the Australian Crime Commission, I am a strong advocate of a partnership approach and the benefits that can be gained from leveraging each others knowledge, capabilities and strengths to deliver truly effective, informed responses.

As Australia’s national criminal intelligence agency, we work closely with our law enforcement and national security counterparts in the States, Territories and Commonwealth.

However as the activities of organised crime groups have expanded and diversified, so too have our partners, and we are increasingly finding ourselves working with agencies outside the traditional law enforcement cadre.

Industry and the corporate sector are part of that cadre.

As our understanding of serious organised crime groups and their activities has matured, we have also recognised the need to not only treat, but prevent organised crime.

And today I would like to specifically talk to you about the important role that you can play in hardening the environment against organised crime and how we can assist you in making yourselves more resilient—thereby minimising the impact on your business, your customers and, importantly, yourselves.

The nature and scope of organised crime

We conservatively estimate that organised crime costs the Australian economy between $10–15 billion each year.

UNODC and the World Bank place the cost of organised crime as between 1–2 per cent of GDP

It is sometimes difficult to imagine the magnitude of the cost. However let me try and illustrate this for you.

Earlier this year, we launched our Organised Crime in Australia report at the Atrium in Federation Square, Melbourne. I’ll come back to the report later, but we chose this venue for one very important reason – its size.

As you can see from the animation being played on the screen to my right/left, if you imagine 100 dollar bills stacked on one another, the cost of organised crime would fill the North Atrium, or an equivalent sized building. In other words,

$15 billion dollars would equate to 16 000 cubic metres in stacked 100 notes.

That’s money organised crime effectively takes from you and your business colleagues, from your neighbours and friends, from every Australian.

However, the impact of organised crime is not just about these dollar figures.

Organised crime impacts on taxes, law enforcement costs and economic confidence. It reaches into our communities and down to an individual level. It can and does ruin lives, ruin businesses, instil fear and fuel other crimes.

And the face of organised crime is changing.

Put aside any past preconceptions you may have about traditionally defined organised criminal groups or the types of figures depicted in popular television series such as ‘Underbelly’. What we face today more closely resembles the corporate world.

Imagine organised crime groups that are quintessential entrepreneurs, unrestrained by any of the bounds of legislation, morality or technology.

Like legitimate business, organised criminals are motivated by profit.

They are strategic. They operate in a borderless virtual world and continuously scan the marketplace to identify emerging opportunities and technologies to exploit.

They are highly flexible.  They will adapt and adjust their operations in response to law enforcement efforts and they will join forces with others where it suits them to regenerate in other markets.

They operate within and alongside legitimate business and spread their operations over several sectors to maximise return and minimise risk. They use logistics planning, aggressive marketing, research and development, and risk mitigation strategies.

And they see a world where they do not need to have the necessary expertise as they can buy it.

This is what we have come to know about organised crime today, however we also know it is a continually evolving force.

The risks and impact on industry

Yet despite the size and scope of organised crime, it still remains a distant, elusive, intangible, and possibly even irrelevant thought for many.

How many of you here today consider organised crime when preparing your risk assessments? How many of you understand the threat of organised crime to the integrity of your business or your industry? How many recognise the potential impact on your operating environment, your staff, customers and suppliers, and your bottom line?  

The reality is that organised crime reaches into many sectors—sometimes almost as a direct competitor and, increasingly, intermingled with legitimate businesses.

Wherever there is an opportunity to make money, you can be sure that organised crime will be lurking in the shadows.  

And not only are they looking to make money, but they are also looking to hide it, relying on money laundering as a key way of legitimising or hiding their proceeds or instruments of crime.

Money laundering activities can include anything from cash smuggling; investing in high-value assets or stocks; hiding money in offshore tax havens; or engaging in gambling activities.

• For example, we have identified the potential impact of organised crime on Australia’s professional sporting industry, as criminals seek to engage in gambling and match fixing as a means of making and laundering money to conceal illegal activity. The cost to society is to destabilise sport.

Organised criminals frequently engage in fraudulent activities and use false or stolen identities to access welfare payments, open bank accounts or obtain credit, acquire mobile phones or other means of communication; and pose as legitimate businesses.

• For example, we have recently seen an increase, enabled through the Internet, in ‘boiler room fraud’ which involves the illegal and aggressive selling of worthless or overpriced shares by scammers posing as investment companies. These sophisticated operations set up call centres, professional websites and business structures, and only ever operate for a short period of time before relocating, resulting in significant financial losses for its victims.

(Emphasise) These organised criminals remove many hundreds of millions of dollars from the growth and wealth opportunities of Australian businesses and customers and can add costs to government later on.

Criminals are also increasingly using industry professionals and service providers such a lawyers, accountants and IT consultants to facilitate their criminal activity, either to access specialised skills or knowledge, or to give an aura of legitimacy to their illegal activities.

These facilitators can be offered significant sums of money, or coerced through blackmail and intimidation.  On other occasions they may be completely unaware that they are in fact facilitating a crime.

The truth is no sector is immune and the impact of organised crime on business and on the community can be devastating.

It can undermine your business, corrupt your staff, instil fear in your customers and damage your integrity and reputation – the effects of which may be irreversible.

The question is how do we go about responding to an ever-evolving transnational phenomenon of immense size – and a recognised national security threat?

The role of industry in hardening the environment

As I alluded to earlier, the approach to organised crime goes far beyond a law enforcement response. As an agency, we acknowledge the need to go one step further to identity potential vulnerabilities, harden the environment and minimise harm.

We need to identity those future opportunities and technologies which may appeal to organised crime groups.

We need to continuously question our methods and approaches so they remain viable in a virtual and borderless world.

We need to ensure we have the appropriate skills and capabilities to tackle a new paradigm of organised crime.

But most importantly, we need to adopt an all-inclusive, collaborative response.    

Effective collaboration between law enforcement, government, and industry is vital—both in terms of combating the crime at hand, and in developing future prevention strategies.

That is why we seek to understand all aspects of organised crime. It is the detailed analysis of methodology that provides opportunities for industry to defend against this threat.

This goes far beyond a conventional evidential ‘points to prove’ approach which seeks to convict. This remains important, but we must also seek to implement a sustainable, long-term impact on organised crime.

Although the ACC is relatively new in the prevention space, it is an area with which we have had some recent success.

For example, in early 2010, we identified a large and sophisticated international organised crime network involved in EFTPOS card skimming activity in Australia.

A national task force was subsequently formed, which drew on the experience of our international partners.  

In the very early days of the task force, the ACC estimated that exposure could have been as high as 100 million dollars , however the collective efforts of law enforcement, financial institutions, and merchants stopped this from occurring – resulting in 56 arrests and the savings of millions of dollars that would have otherwise been diverted out of the Australian economy and into criminal hands.

Well coordinated law enforcement can achieve great results, but the role that industry plays in prevention strategies and hardening the environment cannot be understated.

Following on from this taskforce operation, we supported the Australian Payments Clearing Association to develop the Safeguard against skimming campaign to fight card fraud. The campaign tells retailers how card skimming occurs (so what organised criminals actually do) and how business owners can detect and prevent this from happening on their premises – a very practical outcome.

As I mentioned earlier, we recently launched the Organised Crime in Australia publication—the most comprehensive unclassified report that the ACC has ever released (and we have some copies of the report here today which we are happy to provide).

The report provides Australian businesses, the corporate sector and the broader Australian community with the information they need to better respond to the threat of organised crime, now and into the future.

We are also arming them with the knowledge they need to report potential criminal activities. Such information can sometimes prove the missing piece in the puzzle that law enforcement needs to act on.

So, while organised crime has evolved and seized the opportunities provided by technology, so too have we. We have adapted our approach and become more sophisticated in the way we access, analyse and share information.

And we must continue to work innovatively with all of our partners – including all of you in this room today – to better arm ourselves for the future and minimise the footprint that organised crime has on our country.

Thank you and I understand we may have some time for questions.