The Australian Institute of Criminology yesterday published fresh research that attempts to measure the extent of money laundering.
Money laundering is a poorly measured problem that is, nevertheless, subject to a complex new law (imposed by the US government on the rest of the world) and a new regulatory and enforcement apparatus intended to ensure clerical staff in real estate agents help police this activity - by making it harder for someone to rent a flat without more paperwork than has satisfied property owners for many years.
A paper by John Stamp and John Walker, "Money laundering in and through Australia, 2004", estimated that crooks and opportunists laundered $2.8 billion in Australia, including the following estimates:
- 23 per cent ($651m) in real estate investment
- 21 per cent ($600m) in further crime activities
- 16 per cent ($449m) in gambling
- 15 per cent ($424m) in luxury goods
- 12 per cent ($345m) in legitimate business
- 7 per cent ($191m) in professional services.
Stamp and Walker estimated $3.8 billion as the total proceeds of crime generated by all crime types. The paper does not appear to estimate the cost of crime (to the perpetrators) and thus omits an estimate of the profits of crime.
The abstract of the paper published by the AIC shows that offences involving fraud and illicit drug trafficking headed the list of crimes generating income for laundering.
When the amounts of money involved were compared, fraud exceeded drug crime by a significant margin.
The AIC said the "best estimate" for drug proceeds was $382 million, which was "considerably less" than the estimate by a key 1995 report on the topic.
Frauds collectively totalled $3.16 billion. Respondents to a survey by the report's authors estimated that on average over 80 per cent of drug proceeds, and around 70 per cent of the proceeds of fraud were laundered.
The total value of laundered money involved in cases actually proceeded against was likely to be in the order of only $83 million, according to the AIC. There was no data available for the value of convictions recorded.
The AIC said the banking sector, casinos, the real estate market and the accountancy profession were most commonly believed by survey respondents to be utilised for money laundering in Australia, sending money overseas or receiving it from overseas.
The AIC abstract said the research found that money laundering to, from, or within Australia was characterised by the frequent use of structuring transactions to avoid reporting requirements, accounts in false names, and cash smuggling.
The authors said it is likely that launderers frequently used cash and wire transfers to effect money laundering involving Australia. The use of credit cards, 'payable through' accounts, and other electronic payments was not unusual. They occasionally used gold and precious metals, cheques and other instruments. The use of stored value cards was not frequent.