Money laundering for Dummies

The bit I don’t get with the whole CBA money laundering through ATMs is why?

The fees are so small.

If you are going to launder money you need to (1) take a hefty fee (10-15% should be a minimum) and (2) obtain leverage over the criminal for future use.

Macrobusiness has numerous times (see herehere and here as examples)   covered how the Australian property market is considered a hotspot for stolen money and that the Australian government has ignored the recommendations to put anti-money laundering procedures in place for Australian property.

CBA officials should take note of the Australian Government’s approach to property for a master class in how to launder money effectively.

First, you need to get your fee. Yesterday the Domain  cut some of the numbers for us:

On a $5 million property, that cost blows out an extra $770,499 for foreign buyers, according to Shane Garrett, senior economist at the Housing Industry Association.

The extra costs include an additional $690,490 stamp duty surcharge, the annual ongoing $70,500 in additional land tax and the $10,000 FIRB application fee.

And also

In the case of last November’s $60.66 million sale of luxury car importer Neville Crichton’s Point Piper home through Brad Pillinger and Bart Doff, the FIRB-approved buyer would have had to pay $600,000 just to seek permission to buy it.

Next you have the leverage.

“Hi [name redacted], it’s me [name redacted] again, I’m your parliamentary representative from the [name redacted] Party.

Just wanted to call you to let you know about a few upcoming pieces of legislation that we are considering that might affect you. That pesky anti-money laundering legislation is back, it could prevent you getting the rest of your money over to Australia. Also, considering you are up to 5 houses now, I should remind you that we are getting a bit of pressure on these empty house taxes – that could really set you back some dosh if that manages to get through.

I should also remind you about that special task force to investigate purchases by foreigners. It is almost like the Treasurer is judge, jury and executioner on this one. I know, amazing isn’t it – that kind of legal setup must make you feel like you never left China! Ha ha.

Anyway, just letting you know that we aren’t looking at your purchases. At the moment.

So, with the official side of the call out of the way, let’s switch hats. I should make clear that this next conversation has nothing to do with the stuff I just mentioned. Really, I mean it. Nothing to do with what we just mentioned.

First, I wanted to talk about the new China/Australia think tank we are starting and see if you wanted to contribute? What’s that? No, no, it won’t be expensive to run – most of the money will go straight to the ex-politicians. Bloody Sam Dastyari ruined it for current politicians. The only other cost will be a few translators to transcribe the thought papers from Chinese into English. Then, we really need to discuss the next election, it is coming up wanted to see if you could find it in your heart for a donation?”

CBA money laundering?

Pfffft. Amateurs.

The officially sanctioned path for laundered money in this country is through property. Let’s hope the fine levied on CBA is large enough that the CBA execs don’t forget it.

Damien Klassen is Chief Investment Officer at the Macrobusiness Fund, which is powered by Nucleus Wealth.

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Damien Klassen is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Integrity Private Wealth Pty Ltd, AFSL 436298.