AN INNOCENT couple who have not committed any crimes have still had their fortune frozen by Australian authorities.
For years, Malaysian couple Ganesh Kalimuthu and his wife Macquelene Patricia have been under scrutiny after being caught up in a bizarre money laundering scheme known as “cuckoo smurfing”.
The colourful term refers to dodgy foreign money transfer businesses swapping “clean” cash with drug money before depositing it in an innocent client’s bank account.
The couple, who were planning to move to Perth, were stung after organising for a friend to transfer the proceeds of a recent business transaction into three of their Perth bank accounts.
The acquaintance transferred the cash in a series of deposits of just under 0,000, as transactions over that amount must be reported under the Anti-Money Laundering and Counter-Terrorism Financing Act.
A total of ,466,936.47 was transferred into the Kalimuthus’ various accounts between August and October 2014.
There has never been any suggestion the couple knew about the dirty money, and they have never been charged with a crime.
However, the Australian Federal Police (AFP) claim they should have been suspicious about the cash — and that it should also be frozen to crack down on the money-laundering loophole.
In 2017, WA Supreme Court judge, Justice Jeremy Allanson, ordered the money to be returned to the Kalimuthus as there was no proof they knew it was “linked to criminal activity”.
But the AFP appealed the decision, and late last month WA’s Court of Appeal sided with police.
According to court documents seen by news.com.au, former AFP officer and organised crime, drug trafficking and money laundering expert Murray Smith provided an explanation of cuckoo smurfing.
“ …(It) relies on identifying a person offshore who wishes to transfer funds to a bank account in Australia using a money remitter,” Mr Smith said.
“The remitter withholds amounts corresponding to the amount of money he has been told is to be laundered in Australia. The customer’s bank account details are provided to people in Australia.
“A team of depositors in Australia deposits cash into the bank account, generally at a series of bank branches and below the threshold for reporting transactions involving physical currency. “The account holder sees deposits that match the amounts they intended to remit. Because the amounts of each deposit are below the threshold, there is generally no record that could enable regulatory agencies to intervene.”
Justices Michael Buss, Graeme Murphy and Andrew Beech ruled that the AFP’s appeal should be allowed and the decision by the original judge overturned.
They claimed the Kalimuthus should not have access to their cash due to the Proceeds of Crime Act 2002.
One of the couple’s lawyers, Edward Greaves, told The West Australian they now had just 28 days to apply for a leave of appeal from the High Court.
“Whilst the cases raise difficult legal questions, they also raise serious questions about why the AFP is continuing to pursue innocent people,” Mr Greaves told the publication.