Financial Crimes No Longer Tolerable

Time For Politicians To Get Serious On Financial Crime

Open Letter to Mr Tim Wilson MP
Chairman of the Standing Committee on Economics

From - Victims of Financial Fraud (VOFF Inc) 28 November 2019

Dear Mr Wilson,

News of the allegations that Westpac committed 23 million breaches of Australia's anti-money laundering laws reflects policy and regulation failure. Financial specialist, Alan Kohler, in his book, ‘It’s Your Money’, writes, ‘ … my contention is that the failures in banking and financial services exposed by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Hayne Royal Commission), the terrible behaviour, greed and corruption, are mostly due to failures of policy and regulation that allowed them.’

Is the Standing Committee on Economics aware that many Australians who have been ripped off by financial scams cannot obtain justice?

Has the government any intention of establishing a legacy fund?

In 2017, the Australian Crime Commission carried out a ‘High Risk Funds’ Investigation of illicit cash that crime groups were moving around by exploiting weak laws and questionable banking practices. That’s when The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) came to the public’s attention. The Commonwealth Bank admitting to the late filing of 53,700 money transactions reports, as required under the AML/CTF Act.

From 2004 to 2010, The Australian Securities and Investment Commission (ASIC) licenced Trio Capital Limited, which was operating lawfully within a legal framework, robbed mum and dad superannuation accounts when fraudsters exploited weaknesses in the financial system. The Australian Prudential Regulation Authority (APRA) carried out prudential regulation of Trio, but did the Australian Transaction Reports and Analysis Centre (AUSTRAC) receive any suspicious money transaction reports of Trio’s large and continuous cash deposits? For example, did the custodian bank submit a report for Trio’s single transfer of $50m to a foreign tax haven?

If not, why not?

The Parliamentary Joint Committee (set-up to inquire into the Trio fraud) found that the custodian does very little to protect the funds of investors and it makes no independent checks before transferring money offshore. The custodian simply acts on the instructions of the responsible entity.

Australians are mandated into superannuation, people are encouraged by the government to save for their retirement, and there are tax incentives available to motivate mums and dads to save for their retirement. Mostly it’s elderly Australians who are gouged of their savings by excessive fees, charged fees for no service, sold useless products, placed into multiple super accounts, sold junk insurance, or have their savings stolen by criminality.

In regards to Westpac, Australia identified that the alleged money laundering transactions financed online sexual exploitation of children in the Philippines. This issue was big news. In the case of Trio, no one knows where the money went, or what the money financed. Two Australians devastated by the loss of their savings, stolen by Trio, committed suicide. Their deaths and their Trio connection wasn’t news.

On the 21 November 2019 The Attorney-General Christian Porter on 6PR Morning with Gareth Parker said, “The reason people launder money is to hide the profits of crime and criminality and to fund further crime and criminality, which is why we have such strong laws, such strong penalties and why the government takes such an incredibly robust approach to money laundering.”

No ‘robust approach to money laundering’ was detected in regards to the $194.5m stolen from Trio. The Trio consumers were told there was no money. Not a single dollar was recovered. Yet currently the Australian Tax Office (ATO) has a court action against an owner of Trio Capital for $31 million in unpaid taxes. (Also not a news item!)

In the United States, the tax collected from a Ponzi scheme is called ‘phantom tax’. The phantom tax collected in the Bernie Madoff Ponzi operation was returned to the victims. In regards to stolen mandated superannuation, the Australian government looks like it’s complicit and profiteering from the destruction of lives and livelihoods. Why not allow the Trio fraud to be an example and return phantom tax back to the people who had their savings stolen?

The Standing Committee on Economics needs to act against the endemic theft of mum and dad superannuation savings. It’s time to identify systemic financial system failures. Time to identify structural failures. Time to identify regulatory weaknesses. And time to remediate the people, harmed by the malevolent behaviour found in the financial sector.

John Telford Secretary VOFF Inc
Email: johnt@1earth.net
Phone (02) 4283 5755
R Gallagher Executive Member VOFF Inc
Mobile 0417 415 675
VOFF web site homepage is: http://www.mysuperrights.info/