Sunday, November 1, 2020

One of Australia’s biggest bank Westpac had warnings years ago on anti-money laundering breaches – Leaked Internal Memos


Internal memos have revealed Australia’s second-biggest bank was warned years ago it had issues with anti-money-laundering laws.

The leaked memos said Westpac management did not take responsibility for overseeing the reporting of international transfers, The Australian reported.

Westpac was warned it was breaching anti-money-laundering laws long before financial crime regulator AUSTRAC began lodging cases against the big banks.

CEO Brian Hartzer stepped down on Tuesday after accusations the bank committed 23 million breaches of anti-money-laundering and counter-terrorism financing laws.

- Advertisement -

AUSTRAC is pursuing Westpac in the Federal Court for allegedly failing to report millions of international fund transfers including payments allegedly linked to child exploitation in Southeast Asia.

The bank was first warned in June 2017 there was a ‘poor handover’ to management from the internal team who created the framework for dealing with anti-money-laundering laws.

Management was then ‘unfamiliar’ with the system the bank used to report international transfers.

There are allegations the bank breached laws 23 million times, including by allowing payments tied to child exploitation in The Philippines.

- Advertisement -

It is believed the payments were facilitated despite the bank knowing customers were convicted paedophiles.

Westpac is believed to have failed to report more than 19.5million international fund transfer instructions to AUSTRAC over five years.

AUSTRAC chief Nicole Rose did not comment on the amount of a potential penalty, saying it was a matter for the courts.

But in its submission to the Federal Court, AUSTRAC noted that each of the 23 million breaches attracts a civil penalty between $17 million and $21 million, theoretically putting the bank on the hook for up to $483 trillion in fines.

The global economy was worth almost US$86 trillion ($127 trillion) in 2018, according to the World Bank.

Westpac’s value has plunged by $8billion since the breach was first announced on November 20.

The bank quickly slashed executive bonuses and shut down its international transfer platform LitePay due to the scandal.

Group Chairman Lindsay Maxsted said: ‘The Board accepts the gravity of the issues raised by AUSTRAC.

‘As was appropriate, we sought feedback from all our stakeholders including shareholders and having done so it became clear that Board and management changes were in the best interest of the Bank.’

The move to replace the CEO came after Mr Maxstead met with key investors on Monday who told him that not enough had been done to punish the executive team.

Mr Hartzer was given 12 months’ notice and will still get his $2.7million salary.

- Advertisement -

He is the third top executive from the country´s four major banks to depart in the past 18 months as the Australian banking sector faces a wave of scandals.

‘As CEO, I accept that I am ultimately accountable for everything that happens at the bank,’ Mr Hartzer said in a statement.

‘And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves.’

Mr Hartzer will be replaced by Westpac´s current CFO, Peter King, as of December 2, who announced his retirement in September but will remain until a permanent replacement is appointed.


Former Venezuelan national treasurer indicted in US for money laundering

Hugo Chávez’s former nurse has been charged with money laundering in a Miami federal court, accused of taking bribes from a billionaire media mogul...

Actress Lori Loughlin begins 2-month prison sentence for role in college admissions scam

Actress Lori Loughlin reported to a federal prison in Northern California on Friday to start a two-month sentence for her role in a massive...

FirstEnergy fires CEO, other executives over Ohio bribery scandal

FirstEnergy Corp. has fired its CEO amid multiple federal investigations related to an Ohio nuclear bailout law passed year. The Akron-based utility company announced in a...

Ukraine’s court strips critical power from anti-corruption agency

Ukraine's Constitutional Court has stripped the country’s anti-corruption agency of some of its critical powers. The high court’s ruling published on October 28 declared it...

Former South Korean President Lee Myung-bak sent back to prison for 17 years in corruption case

Former South Korean president Lee Myung-bak was ordered back to prison on Thursday (Oct 29) as the country's Supreme Court upheld a 17-year jail...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World


Latest News

This Week

Lodi City Council candidate arrested for laundering money through gambling

A Lodi City Council candidate and Stockton business owner was arrested Wednesday afternoon on suspicion of money laundering, along with other criminal charges, the...

Former South Korean President Lee Myung-bak sent back to prison for 17 years in corruption case

Former South Korean president Lee Myung-bak was ordered back to prison on Thursday (Oct 29) as the country's Supreme Court upheld a 17-year jail...

Former solicitors used 60 fake identities, homeless people to defraud banks

A married couple who are former solicitors created 60 false identities, donned disguises and paid homeless people for their PPS numbers in order to...

Former airport policeman gets 5 years for role in €1m money laundering case

A former airport policeman and male model has been jailed for five years for his role in the laundering of a total of more...

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks