A Guide to Anti-Money Laundering for Crypto Firms

AFP Targets Italian Organized Crime Clans and Money Laundering in Next Phase of AN0M Sting Operation

Financial Crime Latest News

The Australian Federal Police (AFP) has announced it will target Italian organized crime groups (OCGs) and money laundering syndicates in the next phase of Operation Ironside, which exposed 51 crime groups through a Trojan horse app called AN0M. AFP assistant commissioner Nigel Ryan detailed the extent of Italian OCGs in Australia in a June 7 press conference. The measures announced include a plan to target the ‘Ndrangheta mafia from Calabria in southern Italy due to its money laundering activities within Australian communities, which have been ongoing for decades. 

Data obtained from the AN0M handsets, which were launched last year by the FBI, has given the AFP unprecedented insight into mafia clans and how they operate. The AFP now estimates up to 5,000 Italian mafia members are operating in Australia, with the ‘Ndrangheta is responsible for trafficking 70-80% of the world’s cocaine.

In addition to targeting traffickers themselves, law enforcement will also focus on money launderers who exist “only to enable global drug trafficking syndicates will also be targeted”, including gate-keepers. 

Targeted groups

Of the 51 identified Italian OCGs, the AFP has confirmed that 14 of them are ‘Ndrangheta. Mr. Ryan also noted the strong connection between the ‘Ndrangheta and Australian outlaw motorcycle gangs, stating, “they are pulling the strings of [those] who are behind some of the most significant violence in our communities.”

Shared behaviors of the ‘Ndrangheta include attempting to demonstrate a legitimate purpose behind their illegitimate funds through the use of restaurants and construction firms and maintaining a low profile through modest living. Members also regularly work with Middle Eastern and Asian organized crime groups to help facilitate criminal activity, including money laundering, drug importations, and tobacco distribution.

Since Operation Ironside was launched last year, new laws, such as the Surveillance Legislation Amendment (Identify and Disrupt) Act, have been passed that provide the AFP with additional powers to identify and disrupt criminal gangs. This Act allows the AFP and the Australian Criminal Intelligence Commission (ACIC) to issue three new warrants to collect intelligence, conduct investigations, and prosecute serious criminal online activity. Mr. Ryan stated that these powers, coupled with the data from AN0M, would help direct the AFP to its next targets. 


Organized crime in Australia

The Financial Action Task Force (FATF) highlighted illicit drugs as a key part of organized crime activities in Australia in its most recent mutual evaluation report (MER) in 2015, indicating that this has been an ongoing challenge. The MER notes Australian drug markets are some of the most profitable globally, with the illicit proceeds making their way into the financial system through money remitters, the banking sector, real estate, and complex corporate structures, all facilitated by gate-keepers.

In addition to gate-keepers, the FATF also highlights other designated non-financial businesses and professions (DNFBPs), including lawyers and accountants, who give legal advice to organized crime groups, as a money laundering threat. This aligns with the AFP’s stated focus on tackling firms that enable drug traffickers to launder money. However, Australia’s anti-money laundering and combatting the financing of terrorism (AML/CFT) measures do not currently apply to DNFBPs

Key takeaways

Compliance teams should ensure they are familiar with AUSTRAC’s case studies on drug smuggling in Australia, ranging from narcotics being transported in toys and nappies to casino accounts being used to launder the proceeds of drug trafficking. 

For a comprehensive perspective on current threats, compliance teams should ensure each team member has a robust understanding of the organized crime networks highlighted by the AFP, as well as the everyday behavioral indicators highlighted by AUSTRAC. Rulesets in a firm’s transaction monitoring system should be reviewed to ensure these behaviors are captured. Above and below-the-line testing can ensure that rules are properly calibrated, and are generating appropriate alert volumes.

Following the AFP’s announcement, further updates on targeted entities can be expected as the police continue to utilize the data obtained through AN0M.

The State of Financial Crime 2022

Set your organization up for success and get practical tips and recommendations to help your firm navigate the compliance landscape in 2022.

Download the guide

Originally published June 10, 2022, updated June 10, 2022

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

Copyright © 2022 IVXS UK Limited (trading as ComplyAdvantage).