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Westpac has to pay $ 1.3 billion for anti-money laundering violations


Westpac has agreed to pay a record $ 1.3 billion fine for violating money laundering regulations – and to help finance child sexual exploitation and potentially terrorist activities.

Australia's second largest bank has told the Australian Stock Exchange that it has reached an agreement with AUSTRAC, the federal agency to combat organized crime.

Westpac has admitted 23 million violations of anti-money laundering laws over six years, including failing to report international money transfers valued at more than $ 11 billion.

The bank has admitted an astounding 284 customers in Southeast Asia have been allowed to conduct micropayment transactions related to sexual exploitation rings for children.

Westpac has agreed to pay a $ 1.3 billion fine for violating anti-money laundering regulations

A dozen accounts were set up to fund travel to Asia so pedophiles could abuse children and videotape their ill exploits.

Convicted Australian pedophile Peter Scully, jailed for rape and human trafficking in the Philippines, allegedly used Westpac accounts to sell videos of child exploitation.

Australia's oldest bank submitted an agreed statement of fact to federal court on Thursday morning.

This 94-page document was posted on the ASX website admitting how Westpac violated anti-money laundering and terrorism laws between 2013 and 2019.

Westpac CEO Peter King apologized after agreeing to the highest fine in Australian corporate history.

"I sincerely apologize for the bank's shortcomings," he said.

Westpac CEO Peter King apologized after agreeing to the highest fine in Australian corporate history

Westpac CEO Peter King apologized after agreeing to the highest fine in Australian corporate history

His New York-born predecessor, Brian Hartzer, stepped down as managing director in November after AUSTRAC, also known as the Australian Transaction Reports and Analysis Center, alleged that Westpac had allowed 12 customers to conduct nearly 3,000 child exploitation transactions, bringing up 480,000 U.S. Dollar equals.

This month, AUSTRAC Managing Director Nicole Rose had presented evidence that the bank had not performed due diligence on high-risk transactions in the Philippines and Southeast Asia that harbor potential risks for child exploitation.

Home Secretary Peter Dutton said Westpac was putting Australia at risk.

"The banks have a responsibility not to go undetected criminal activity and to protect Australians from serious and organized crime such as child exploitation, drug trafficking and fraud," he said on Thursday.

His New York-born predecessor Brian Hartzer (pictured) stepped down as managing director in November after AUSTRAC, also known as the Australian Transaction Reports and Analysis Center, claimed Westpac allowed 12 customers to conduct nearly 3,000 child exploitation transactions, which is equivalent to $ 480,000

His New York-born predecessor Brian Hartzer (pictured) stepped down as managing director in November after AUSTRAC, also known as the Australian Transaction Reports and Analysis Center, claimed Westpac allowed 12 customers to conduct nearly 3,000 child exploitation transactions, which is equivalent to $ 480,000

“They should be able to trust the banks and financial services they use every day to have strong systems to protect the community from crime.

"In this case, Westpac broke that trust and left its customers in the lurch, which ultimately put the Australians at risk."

Home Secretary Peter Dutton said Westpac was putting Australia at risk

Home Secretary Peter Dutton said Westpac was putting Australia at risk

On Thursday, Mr King promised that Westpac would fix its accounting systems so that money laundering laws would not be violated again.

"We are determined to fix the issues to make sure these bugs don't happen again," he said.

Mr King said Thursday that Westpac had closed relevant products and reported all relevant transactions.

The bank's international money transfer service LitePay was only discontinued in November 2019 – three years after AUSTRAC first warned Westpac management about illegal transactions.

Former Westpac chairman Lindsay Maxsted released a statement that the month of recognizing special security features to combat child exploitation in the Philippines didn't come into effect until June 2018 – two years after LitePay launched.

Westpac had set aside $ 1.027 billion in the first half of fiscal 2020 to fund a fine from the money laundering scandal that preceded Thursday's announcement.

The bank has admitted to violating the Anti-Money Laundering and Terrorist Financing Act 2006 in transactions between November 2013 and November 2019. Gail Kelly (pictured) was Westpac's South African-born CEO for a year

The bank has admitted to violating the Anti-Money Laundering and Terrorist Financing Act 2006 in transactions between November 2013 and November 2019. Gail Kelly (pictured) was Westpac's South African-born CEO for a year

The bank has admitted to violating the Anti-Money Laundering and Terrorist Financing Act 2006 in transactions between November 2013 and November 2019.

Gail Kelly was the South African born CEO of Westpac in a year.

Alan Kirkland, CEO of consumer group CHOICE, said no Westpac manager has been properly held accountable.

"Today's agreement between AUSTRAC and Westpac clearly shows that the personal accountability of executives in the financial sector is still lacking," he said.

"Neither the regulators nor the courts have held any executives or officers at Westpac accountable for this heinous management failure."

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