Banks and bookmakers that were hoodwinked by a gambling syndicate that created multiple accounts in other people’s names to hide their true identities may have breached their anti-money laundering obligations.
Guardian Australia has confirmed a gambling syndicate paid $1,000 to desperate men for their ID documents, which were used to create multiple bank and betting accounts in their names. Cash was deposited into these bank accounts and gambled with at least nine bookmakers.
Those deceived have expressed frustration at syndicates that go to “extreme and sophisticated lengths to avoid detection” and called on the federal government to introduce tougher laws and for regulators to clamp down on them.
A spokesperson for the federal attorney general’s department said “businesses that fail to put appropriate policies and procedures in place to know who their customers are (…) may be breaching their anti-money laundering and counter-terrorism financing obligations”.
“Austrac can take a range of enforcement action against businesses which do not meet their obligations, including significant civil penalties,” the spokesperson said.
The spokesperson, whose comments were general in nature and not directed at specific bookmakers or banks, said businesses were also obliged to report suspicious activity to Austrac, the financial intelligence agency. Recent guidance issued to the gambling industry states reports should be lodged when bookmakers suspect a customer is “not who they claimed to be”.
Documents seen by Guardian Australia also show the syndicate placed bets with Australia’s largest online bookmaker, Sportsbet, while using another person’s name.
In a statement, Sportsbet said it retrospectively closed accounts once it became aware “ID theft has occurred”. In this case, the person whose name was registered with Sportsbet did not know an account had been created in his name.
“Some organisations go to extreme and sophisticated lengths to avoid detection,” the spokesperson said.
“We regularly test the controls we have in place for ongoing effectiveness and would support any greater enforcement powers available to regulators to further clamp down on this kind of fraud.”
Several other bookmakers deceived by the syndicate have expressed similar views.
Emails seen by Guardian Australia show one major bookmaker froze gambling accounts linked to the syndicate after becoming concerned they were not controlled by the listed account holder.
When the bookmaker asked for additional ID verification checks to be completed, the syndicate contacted the true account holders and offered them more cash for their cooperation. It is not known whether the bets were eventually accepted.
One of the banks deceived by the syndicate prohibits customers from sharing their identity documents with third parties, who may then take control of accounts in their names. It warns doing so may be a criminal offence.
The Australian Banking Association, which represents some of the deceived banks, has also urged the government to do more to tackle this issue.
“Where banks become aware of mule accounts they are required to report them to Austrac,” an ABA spokesperson said. “The ABA would support stricter laws around money muling, including laws relating to solicitation of using an account as a money mule.”
A spokesperson for the Northern Territory government, which regulates many of the bookmakers deceived by the syndicate, said “wagering operators generally use a third-party verification agency”.
“The commission has been made aware of the practice referred to in the article, and understands that wagering operators are continuing to take steps to try to address the issue,” the spokesperson said.
Many of the gambling syndicates operating in other people’s names insist they have not broken any laws. But the former Australian federal police financial investigator and lawyer Tam McLaughlin told the ABC there was “a strong chance” they had.
“You are not allowed to receive a designated service, which includes placing a bet, without being the person whose name the account is held in,” said McLaughlin, who is now a partner at fraud and corruption firm Duxton Hill.
• In Australia, Gambling Help Online is available on 1800 858 858. The National Debt Helpline is at 1800 007 007. In the UK, support for problem gambling can be found via the NHS National Problem Gambling Clinic on 020 7381 7722, or GamCare on 0808 8020 133. In the US, call the National Council on Problem Gambling at 800-GAMBLER or text 800GAM
