Topic: Launch of the Report into Serious and Organised Investment Fraud in Australia
QUESTION: Given that this activity is based overseas, how do you [inaudible] and why are you cooperating with [inaudible]?
JASON CLARE: It’s a good question. I made the point, and Mr Lawler made the point, that a lot of syndicates that are involved in this type of investment fraud are based overseas – many in South East Asia.
It’s critical that we not only work together as a team here in Australia with all of the different law enforcement agencies working with the finance industry, but it’s critical that we also work closely with law enforcement agencies overseas.
I gave you one example of working closely with police in Hong Kong, but that’s just one example. Critical to success here is working with law enforcement agencies all around the world, and I might invite Mr Lawler to give some examples and talk in detail about how we do that.
JOHN LAWLER: The question of the internet, of course, and its impact on jurisdiction and the ability to gather evidence is at the heart of your question. That doesn’t mean to say that law enforcement and the regulators are impotent to dealing with these sort of frauds when they’re offshore – quite the contrary.
But it is a fact that there are other treatments that need to happen in conjunction with traditional law enforcement activities. Part of it is about raising public awareness. Part of it is about disruption. Part of it is about better coordination. And so even in the agencies, if we can get the critical information of what are the fraudulent bank accounts, what are the fraudulent companies that are being used by these scammers, at the first available opportunity into industry so they can actually put preventative strategies in place, then we actually break the business model of organised crime.
Part of it will be around prosecution and extradition and bringing people who commit these frauds either back to Australia or to try them in their jurisdictions, but part of it will be about disruption and prevention. This is the first time we’re bringing those three elements together in any real coordinated way. It’s my very firm view that if we do that we will be successful in disrupting these sorts of scams.
QUESTION: The only thing – forgive me if I’m wrong and please correct me if I’m wrong, but what I see out of this press release made today and the announcement being made today is a financial commitment to a mail-out – to a public awareness campaign. Is there anything substantial about this announcement that you’re making today that involves financing or beefing up the policing of this issue?
JOHN LAWLER: Well, I don’t agree with you and if I may correct you?
QUESTION: Please.
JOHN LAWLER: There is the mail-out which is a very important part of this strategy, and I thank Australia Post for partnering with us to do that. But this has been a task force in operation since 2011. Nineteen agencies from across the country looking and focusing on how they disrupt and prevent this sort of fraud impacting Australians. Now that’s not happened before in Australia’s history.
QUESTION: But the report says that it’s getting worse.
JOHN LAWLER: Well, what we’ve got is we’ve got global forces and we’ve got organised crime threats that are very, very significant. We need to fight them and tackle them head on. What we’ve seen in this report and in the work of Task Force Galilee is that actually happening.
If we try and prosecute, as the question was earlier, all of these people in foreign jurisdictions, that will not be possible. That will not be possible and that will not stop these organised criminals. We need to tackle them in a new and innovative way, which is what this task force is doing.
QUESTION: Public awareness?
JOHN LAWLER: Public awareness is one dimension. As we heard from Mr Medcraft, that’s about stopping victims from becoming victims. Everyone would agree if you can do that, that’s an advantage. But we accept that there will be victims. We suspect that there will be organised criminals in this space.
How do we disrupt them? Disrupting them is about coordinating the information so that it can actually get to the right people, so that the financial institutions can alert people who try to send money abroad at the first available opportunity that they’re sending it to a fraudulent investment scheme. That deprives the organised criminals of the money that they would have otherwise got.
Now coordinating that across Australia is a significant achievement – a very significant achievement. And the third thing that is required to be done is the traditional policing responses. So, we need to better coordinate through the Australian Federal Police and the State and Territory Police, through ASIC the response to these people who are outside of our legal jurisdictions. They’re in other countries around the globe but there are financial assets and fraudulent operations. So, that’s what’s different and that’s why we’re launching the report here this morning.
QUESTION: Mr Lawler, the Minister has mentioned Asia and South East Asia as an area of concern. Any others around the globe?
JOHN LAWLER: Well, what we see as we see the operations – the actual boiler room operations – and some of these frauds and some of the strategies are equally applicable to other frauds. So, it actually captures a broad range of offending, but we are focused in on boiler room frauds that are predominantly positioned in Asia.
We do see their financial networks actually routed through multiple countries around the globe – into Europe, into Eastern Europe, into the Caribbean and other locations. Part of the business model is to actually disguise where the funds are going. So they try and put it through as many different trusts and nation states as they can so that the money trail is lost. And part of our efforts are to, of course, work with the regulators and the financial institutions to identify that.
QUESTION: Mr Lawler, have you been able to build up a profile of these fraudsters? Have you got the profile?
JOHN LAWLER: Part of the work over the last eighteen months or so has been to get intricate knowledge about how they operate. We do have a very good understanding of who some of these people are, how their operations work in minute detail. And that’s part of the intelligence picture. That’s part of our ability then to look for weakness and vulnerability to penetrate the organised criminals.
We have a very good understanding of the criminal networks, but it’s fair to say that they don’t stay static. As we respond and they respond. We need to be coordinated, well-connected with our information, and we need to be responding – that’s law enforcement and the industry and the community – in an equally flexible and agile way. That’s what this task force is enabling us to do.
QUESTION: [inaudible] there organisations or one man outfits? What’s the…
JOHN LAWLER: No, these are very sophisticated organisations. These are backed with many millions of dollars. So this is not backyard enterprises. These are very sophisticated operations. Sometimes set up in multiple jurisdictions that actually have teams of people whose sole purpose is to set up bank accounts and to set up financial structures to rout the money.
Specific teams set up designing websites – fake websites of the regulator, so that when you go on to their sites they have the regulators false sites saying how good the investments are and how they have absolute integrity. So very sophisticated and you don’t do that through a backyard operation. These are very well resourced, very well organised criminal organisations.
QUESTION: Can we just ask the Minister a question, please? Minister, we’ve heard that there is some sort of nefarious coordination going on with this task force which will help the present situation. Today we’ve been told that there’s going to be a mail-out to increase public awareness. Well done. But are you funding these authorities to the extent that they need to be funded to actually fight this crime as opposed to just making people more aware of it?
JASON CLARE: Thanks for the question. I think Mr Lawler’s made the point that we’ve got a joint task force that’s got some nineteen, twenty organisations that are working together on this. You’ll be hard pressed…
QUESTION: [Interrupts] But the situation’s getting worse?
JASON CLARE: You’d be hard pressed to find another task force with so many organisations working together to tackle such a serious organised criminal enterprise. This is going to be a big problem for Australia, because as our superannuation funds continue to rise we become a bigger target for criminal syndicates right across the world.
We’ve got more than a trillion dollars in superannuation savings in Australia and that makes us a target for criminals who want to get their hands on that money. That means that law enforcement agencies across the country need to work together, and we’re doing that through Task Force Galilee. It means we need to work closely with the finance industry, but it also means that we need to get the message out to the Australian community.
As I said before prevention is better than cure. Once the money has been stolen from you, it’s very hard if not impossible to ever get that money back.
So the more information we get to the Australian public about this, the better chance we have of preventing criminals getting that money off Australian citizens in the first place.
QUESTION: Is that enough?
JASON CLARE: I don’t think that this fight will ever stop. We’ve got to make sure that we’re directing all of the attention that we can from all of the key law enforcement agencies whether it’s state police, federal police, the Crime Commission, ASIC, whether it’s the right research that needs to be done through the Australian Institute of Criminology, to make sure that we’re targeting the right areas.
There’s been terrific work done by Galilee led by the Australian Crime Commission so far. It’s led to arrests that we’ve seen in Queensland, it’s led to the arrests that we’ve seen in Hong Kong. But just look at the figures – two-and-a-half thousand Australians have had their superannuation funds ripped off within the last five years. There’s a lot more work to do.
It needs to be led by all of these agencies working together, and getting the message out to Australians to be wary of anything that looks too good to be true, because there’s a big chance that there’s a crook behind it who wants to steal your money.
QUESTION: How big a role are telcos and internet providers here in Australia playing at all – if at all?
JOHN LAWLER: The telecommunication sector is a very important sector, that’s why we’re here at the Melbourne Telephone Exchange at the Museum because it’s initiated by cold-calling. But it’s also used and facilitated through the internet and they become very, very important collaborators, particularly with the regulator. And we do have the telecommunications and the ISP associations engaged with this initiative as well.
There’s a range of things they can do to help in a disruption context. And it becomes about alerting and warning, and when monies are to be sent, or whether we have companies that are identified as being involved in investment fraud that the actual victim is alerted to the fact that these are known to the authorities.
As I said earlier, the sooner we get this information the more effective the Task Force and the work can be.
QUESTION: How much funding does the taskforce have?
JOHN LAWLER: The taskforce is being funded through the resources of the agencies involved. So it’s about coordinating resources to deal with the taskforces priorities. Now that will vary from stage to stage. As we’ve heard about direct law enforcement intervention, of course that’s funded through law enforcement agencies resources that they have [inaudible] and so it is with the Commission’s work.
But the real power of this, particularly the Task Force has been an ability to actually coordinate all the different perspectives and efforts and capabilities and to try and align those in a powerful strategy. And if you think about that for a minute or two that is an enormously powerful thing to have occurred.
People might ask well why hasn’t that been done already. And the reality is that it’s been brought to the Commission’s attention as a coordinated role to actually under our legislation bring these agencies together, and where the information can be [inaudible] lawful and the privacy of individuals are protected but where we can attack organised crime the way Task Force Galilee has done so.
QUESTION: So just ballpark figure for the funding? Are you able to give an overall figure of how much is being spent on the Task Force?
JOHN LAWLER: I don’t have that because I haven’t been out to each of the nineteen agencies or the industries to say how much have you spent on this particular initiative. All I can say is that this return on investment is an enormously beneficial activity and every dollar we can stop going into the hands of these criminals does three things.
Firstly it stops people’s lives being devastated. And people who lose their life savings will likely have to rely on the community to support them. So they’ll likely have to go onto welfare or other benefits which you and I will pay for. And the third most important thing here is that this money is being deprived to the Australian economy. This is money that’s actually going offshore to some other far flung place and we need to do all we can that this would be money far better spent by the, with and through the industry representatives we have here today. Thank you.
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