Speaking to the AIST Symposium on Risk Management, Markus Erikson, a director in AUSTRAC’s intelligence division said reporting from super funds has been critical to identifying and stopping organised crime.
“Given the size of superannuation holdings and the level of criminal activity in the sector, it is likely that all funds will be exposed to potential suspicious matters,” Mr Erikson said.
“Low levels of reporting compared to industry peers may be an indicator of an effective AML/CTF program, or a need to do further in this space.”
The ATO told Investor Daily that currently there are 10 matters under investigation for the Tax Office-led joint agency, the Serious Financial Crime Taskforce (SFCT), in relation to the government’s coronavirus economic stimulus.
The AFP, which is a member of the taskforce, confirmed since initial reports broke of up to 150 fund members having their money wrongly released in May, it has made one arrest in relation to the scheme.
“Unfortunately, there is always going to be a small minority of people who look to exploit government measures and access money for which they are not eligible,” an AFP spokesperson said.
The Federal Police is monitoring early release scams through the government’s anti-fraud Taskforce Iris.
In the 2018-19 financial year, AUSTRAC received 158 million transaction reports, representing an annual increase of 16 per cent – including 246,000 suspicious matter reports, which reflected a 95 per cent increase.
A 2016 risk assessment review of the super sector by the regulator found the size of the industry made it an attractive target for money laundering, with fraud the most prevalent crime.
Based on reporting it has already received, AUSTRAC has identified three types of suspected fraud against the early release measure: individuals manipulating their economic circumstances on documents or information to gain access, single level fraud, where individuals will gain access to others’ super and larger-scale fraud conducted by networks or organisations.
Mr Erikson noted some funds are holding the misconception that they need to have complete and comprehensive information about suspicious matters before they report.
“Financial industry reporting has led to the disruption of [large-scale] fraud against the temporary early release of superannuation stimulus initiative,” he said.
“Reporting that has been of significant value has included the identification of newly established accounts, a customer advising they’ve received a notification despite not submitting an application for the early release of superannuation. [And] other things like common identifying information, including someone’s address, a phone number and email they use to open multiple super funds accounts, shared internet protocol or IP address information being used to establish and access accounts in individual names.”
Other flags for suspicious activity have included the rapid transfer of received funds from the recipient account to other accounts or to an offshore account, as well as multiple payments being sent to a single account.
“The inclusion of the information related to these scenarios and suspicious matter reporting has greatly assisted law enforcement investigations regarding fraud of the temporary release of superannuation,” Mr Erikson said.
“This has included the stopping of additional payments [and] the restraint of released funds.”
An ATO spokesperson commented there may be a “small number of people who seek to fraudulently access money they’re not entitled to”, adding the Tax Office’s compliance measures will identify culprits who try to rort the system.
The Tax Office signalled in June that it would be zeroing in on COVID-related fraud, with it planning to check up on recipients.
