Organised crime in Australia

Fraud and financial crime

Fake identity card Financial crime can undermine the safety and security of Australia and also comes at a high cost. Organised crime also relies on the ability to launder large sums of money and looks for opportunities to commit other frauds.

A Price Waterhouse Coopers global economic crime survey conducted in 2007 found that more than 40 per cent of Australian companies interviewed had suffered from financial crime in the previous two years¹. Half of these companies reported losses of more than $1.5 million.

Financial crimes continue to increase in the spread, scale and overall harm they cause to society. The modern globalised economy and new technologies have created additional opportunities for fraud and financial crime. They have also led to different ways of undertaking existing offences.

Money laundering

Money laundering is a diverse and complex criminal activity used to disguise the origin of criminal profits.

Money laundering can include practices such as:

transfers to financial institutions in countries where Australian law enforcement has limited visibility
transfers to other asset types which cannot be easily traced
gambling
the use of money remitters.

Money laundering is a major component of most criminal activity and delivers great cost to the Australian community. Examples of how money laundering impacts the community include:

'crowding out' of legitimate businesses in the market place by money laundering-front businesses
large-scale unanticipated funds transfers that can influence the volatility of exchange rates and interest rates
increasing the tax burden on Australians by evading tax payments.

'Following the money trail' presents significant opportunities for law enforcement. However the speed, anonymity, reach, complexity and variety of criminal financing is increasing, as is the complexity of identifying, investigating, prosecuting and recovering funds from money launderers. This increasing complexity is driven by the diversification and growth of the global financial sector and advances in information technology.

The Australian Institute of Criminology has reported that money laundering from all crime types in and through Australia amounted to $4.5 billion in 2004². However, as this figure does not include factors such as tax evasion, the real cost is likely to be higher.

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Technology and fraud

Technology can underpin a range of frauds. Technology can be used to:

steal people's identity and banking details–by persuading people to unwittingly release that information
carry out transactions on the behalf of criminals
gain profit through computer hacking
disrupt business by use of viruses and computer vandalism.

Rapid changes in how people use communications devices are creating numerous opportunities for criminals. This sets an ongoing challenge for law enforcement to maintain and develop the skills and expertise needed to effectively counter technology-enabled criminal activities.