Key issues

4.1        This chapter provides an overview of some key issues the committee discussed with the Australian Crime Commission (ACC) during the committee's hearing on the ACC's 2014–15 annual report. Amongst other things, it outlines the ACC's current operational focus and some areas of interest for the committee, including:

• the merger between the ACC and CrimTrac;
• the ACC's international capabilities;
• the National Criminal Intelligence System; and
• the effectiveness of unexplained wealth legislation.

4.2        Broadly, the ACC highlighted some of its achievements for 2014–15. These achievements included:

• the production of over 6500 intelligent products shared with over 265 agencies;
• the production of over 2300 analytical and tactical products;
• a new service that delivered 4333 automated alerts on criminal targets, such as outlawed motorcycle gangs (OMCGs); and
• 176 coercive examinations, 19 joint operations and investigations, and the disruption of 54 significant criminal enterprises.[1]

Merger between the ACC and CrimTrac

4.3        On 5 November 2015, Minister for Justice, the Hon Michael Keenan MP, announced the Law, Crime and Community Safety Council had agreed to a merger between the ACC and CrimTrac.[2]

4.4        The ACC's annual report for 2014–15 does not specifically discuss the merger between the ACC and CrimTrac; however, it does note that consultations had occurred between the ACC and the Australian Institute of Criminology (AIC) to consider a merge of these two agencies.[3] Organisational changes to the ACC are based on recommendations issued by the National Commission of Audit.[4]

4.5        The ACC updated the committee about the status of the merger between the ACC and CrimTrac. It explained the merger, at its heart, 'is to provide a single point of reference for both law enforcement information and intelligence that goes beyond what is presently available today'.[5] At the time, legislation to enact a merger between the ACC and CrimTrac was being considered by Parliament and plans were underway to implement this change.[6] 

4.6        The committee will report on this merger at greater length when it considers the annual report for the ACC for 2015–16.

International capabilities

4.7        The ACC's international capabilities expanded in 2014–15. In its annual report, the ACC stated that it had secured funding from the Proceeds of Crime Act 2002 to deploy ACC officers to offshore locations. These officers complement existing deployments by the Australian Federal Police (AFP) and other agencies to 'improve national understanding of transnational enterprises that are impacting on Australia'.[7]

4.8        Further information about the deployment of ACC officers abroad was provided to the committee during its public hearing. The ACC asserted that 70 per cent of criminal entities on the national criminal target lists are:

...either domiciled overseas or have Australian connections with international partners. We are increasingly having to interdict international crime that impacts on Australia.[8]

4.9        In 2014–15, the ACC deployed:

• a criminal intelligence analyst to the United Arab Emirates (Dubai);
• an officer to Hong Kong, who is co-located with the Australian Federal Police (AFP), the Department of Foreign Affairs (DFAT) and other partner agencies; and
• a cybercrime specialist to the United States' (US) Federal Bureau of  Investigation and an analyst specialist with the Special Operations Division in the US Drug Enforcement Administration.[9]

4.10      Plans are in place for an ACC officer to be deployed with New Zealand Police. Additional deployments are being also negotiated with the United Kingdom's (UK) National Crime Agency and Europol in Europe.[10]

4.11      The committee questioned the ACC's capacity to oversee risks identified on mainland China, namely the exportation of crystal methamphetamine. In response, the ACC advised the committee that its officer based in Hong Kong is very closely connected to and part of a taskforce relationship to mainland China.[11]

National Criminal Intelligence System

4.12      The ACC's 2013–14 annual report noted the Australian Criminal Intelligence Forum (ACIF) had agreed to support the development of a National Criminal Intelligence System (NCIS).[12]

4.13      In its update on the NCIS, the current annual report confirms that the ACC had secured $9.799 million funding for the NCIS under the Proceeds of Crime Act 2002. Once completed, the NCIS:

...will connect to existing systems and help develop intelligence across the spectrum, from volume crime through to serious and organised crime and national security. Importantly, the states and territories will also be able to use the NCIS to improve community safety and crime prevention. At its full capability, the NCIS will connect to existing systems and help develop intelligence across the spectrum, from volume crime through to serious and organised crime and national security.[13]

4.14      The ACC informed the committee that the creation of the NCIS 'is right at the core of one of [its] main planks of reform' with the merger of the CrimTrac, the AIC and the ACC.[14]  The ACC added that the current system within CrimTrac is not connected, and this lack of connectivity between criminal intelligence and law enforcement presents a risk. Further:

There are greater and better opportunities to better use existing holdings. The information, particularly for front-line policing, is quite critical to ensuring that police on the ground can do their job safely. It is the view of the commission that a merger will deliver—particularly front-line police—with more up-to-date, complete and accurate information when dealing with the conflict and the trauma that they have to deal with. It will comprehensively add to the national picture of volume crime, organised crime and national security threats that face Australia.[15]

4.15      The goal of the NCIS is to draw data from the 'repositories of information that is sitting amongst the eight state and territory police jurisdictions';[16] and by connecting this information, the ACC will create a 'searching and matching facility' for law enforcement agencies.[17] The NCIS aims to:

...deliver, in simple terms, a better national criminal reference system which CrimTrac have combined with what the fusion data is producing for the ACC in a more agile sense. There is the spectrum of providing the policeman on the ground with situational awareness and instant threat through a master search capability so that you actually have that capability to search across all of the criminal holdings across Commonwealth partners and state and territory police. But the spectrum also goes all the way to the ACC analysts who might be looking at serious organised crimes. The fundamental concept or principle of that system is to provide users with the data that they need to do their job independent of the organisation they are from or what their particular needs may be.[18]

4.16      It improves upon CrimTrac's existing ViCLAS system, which is not supported by all jurisdictions because it is 'very resource intensive and requires the human effort to data entry every single report in order that you can get amore composite picture'.[19]

Unexplained wealth

4.17      The ACC participated in the committee's inquiry into financial related crime, and supported the subsequent changes to the Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Act 2015.[20]

4.18      Despite changes to current unexplained wealth legislation, the ACC informed the committee that challenges remain. One significant hurdle has been creating a nationally consistent unexplained wealth regime across all jurisdictions. The ACC said:

...it is not presently accepted throughout Australia on an unexplained wealth regime. But those jurisdictions that are supporting it see that as an extremely valuable tool in addition to the conviction-based proceeds of crime regime. It is fair to say that there have been inconsistent approaches across the nation in terms of unexplained wealth. Most of the prosecutorial processes there have, historically, been easier to prove in terms of a predicate conviction-based regime. The unexplained assets one is one that we think has a much greater opportunity for those, particularly higher level serious and organised crime figures, who are able to insulate themselves because they get others to do their bidding and they legitimise some of their businesses and wash their assets through legitimate business fronts. It is something that has been internationally recognised for many, many decades that, once an entrenched criminal syndicate are able to then front up with a legitimate business house, or indeed their private assets are consistent with their income, that is where we see a very important tool to add to the conviction-based regime. I see there is a lot of room for improvement there, and it is certainly one that the Minister for Justice has been leading through the public safety and community council.[21]   

4.19      The ACC added that it is currently reviewing other models of unexplained wealth legislation found in Australia for further evaluation and government consideration.[22] 

Criminal Assets Confiscation Taskforce

4.20      The Criminal Assets Confiscation Taskforce (CACT), through the ACC's Targeting Criminal Wealth special investigation (Project Astor), coordinates proceeds of crime activities. The CACT is a collaboration between the ACC, AFP, the Australian Taxation Office (ATO), and state and territory agencies.

4.21      The ACC helps to 'generate and prioritise organised crime targets for proceeds of crime action, and [provides] strategic advice on illicit money flows affecting Australia'.[23] In 2014–15, the ACC referred 88 entities to the CACT, comprising an estimated value of offending of $80.81 million. CACT's other achievements for 2014–15 include:

• $237.9 million assets restrained;
• $52.4 million assets forfeited; and
• $95.3 million liabilities raised.[24]

Australian Gangs Intelligence Coordination Centre

4.22      The Australian Gangs Intelligence Coordination Centre (AGICC) continues to play a key part of the government's strategy to target OMCGs and other known gangs that operate across state and territory jurisdictions.

4.23      Established in December 2013, AGICC operates under Project Legion, linking strategic understanding of gangs at a national level with intelligence. The ACC provides dedicated intelligence to support the capabilities of the AFP led National Anti-Gangs Squad. Further, AGICC employees are deployed to partner agencies to support investigations, such as the South Australian Police, Victorian Police, the NSW Police Force and the Queensland Police Service.[25] It is housed in a custom built operations room within the ACC's headquarters, and partners with specialist staff from the AFP, ATO, Centrelink, the Department of Immigration and Border Protection (DIBP) and the then Australian Customs and Border Protection Service.[26]

4.24      During 2014–15, AGICC directed the collection of intelligence for the National Collection Plan, with intelligence on 'OMCG leadership, wealth, violence, pathways, and international networking and criminal cooperation'.[27]  AGICC contributed intelligence to 72 law enforcement operations,[28] a significant increase from the 28 operations in 2013–14.[29]  Other statistics for 2014–15 include:

• providing 459 intelligence reports (399 more than 2013–14);
• responding to 175 requests for information; and
• directly contributing to the arrest of five OMCG members, and indirectly contributing to the arrest of a further eight.

4.25      Further, the AGICC produced a Gangs Intelligence Hub that enables and strengthens information to be shared with partner agencies in Australia and abroad, and a National Gangs List (NGL), which is a national list of OMCG members. The NGL forms a set of nationally consistent categories and standards for data entries and was a developed in with the ACC's Task Force Morpheus partners.[30]

Task Force Morpheus

4.26      In September 2014, a new multi-agency task force, Task Force Morpheus (Morpheus) was formed, building upon the success of its predecessor, Task Force Attero (Attero).  Morpheus, unlike Aterro, has a broad focus on all OMCGs (not just the Rebels OMCG) and the risk OMCGs pose to the Australian public. The ACC contributions are coordinated through the AGICC and the National Anti-Gangs Squad framework.

4.27      Through Morpheus, the AGICC has been able to 'drive and test national approaches and improvement in dealing with OMCGs', such as forming national capability development requirements (see the aforementioned NGL), national standard definitions and approaches to 'identifying, disrupting and preventing OMCG-related serious and organised crime'.[31]

4.28      The ACC informed the committee that Morpheus is conducting investigations into a number of OMCGs, which:

...still present themselves as one of the more prominent serious organised crime threats and groups to Australia and, despite the public profile they are attempting to project, we firmly put them amongst the more serious groups that are impacting in crime in Australia.[32]

4.29      To date, Morpheus has resulted in 906 arrests on 2043 charges, and the execution of 441 search warrants. Further, Morpheus has seized:

• 207 firearms and 6162 rounds of ammunition;
• 12 motor vehicles and nine motor cycles;
• more than $1.35 million cash; and
• 43 kilograms and three litres of methamphetamine, 55.7 kilograms of cannabis and 586 cannabis plants, 2703 steroid pills, and other unlawfully possessed substances, including prescription drugs.[33]

4.30      The ACC board authorisations for 2014–15 have Morpheus continuing until December 2015.[34]

Task Force Eligo

4.31      Task Force Eligo (Eligo) continued its work detecting and investigating incidences of money laundering. It was established in 2012 to target 'money laundering through the alternative remittance sector and informal value transfer systems'.[35] It is led by the ACC, in partnership with Australian Transaction Reports and Analysis Centre, the AFP, and other Commonwealth, state and territory partners.[36]

4.32      In 2014–15, Eligo identified 112 criminal targets previously unknown to law enforcement agencies,[37] 17 more than 2013–14.[38] Eligo also establishes links between money laundering and other illicit crime, especially drug trafficking. It contributed to the disruption of $1.6 million in cash and the seizure of 257 kilograms of illicit drugs with an estimated street value of $230 million. This seizure occurred after the ACC identified a Hong Kong based organised crime syndicate that laundered money and trafficked illicit drugs.[39]   

4.33      In addition to its work relating to the detection of laundered money, Eligo has also identified emerging issues, including:

• an analysis of how laundered funds pass through jurisdictions (within Australia and abroad), and the methodologies by which serious and organised crime groups move illicit monies; and
• previously unknown professional money laundering syndicates that operate transnationally who market their services to organised crime groups, including identifying the identities of offshore entities that control and direct the work of these money laundering syndicates.[40]

4.34      The ACC Board's authorisation for 2014–15 granted an extension to Eligo to 31 December 2015.[41]

Project Wickenby

4.35      Project Wickenby (Wickenby) was a joint investigation that began in 2004 and concluded on 30 June 2015. It focused on wealthy individuals who utilised the offshore financial system to evade tax and hide and conceal assets. Wickenby was the largest investigation into tax evasion in Australia's history, and 'shifted the way the community perceived tax crime and forged unprecedented partnerships across government agencies and tax administration, both domestic and international'.[42]

4.36      Overall, Wickenby achieved the following:

• $2.297 billion tax liabilities raised;
• $985.67 million in outstanding revenue recouped;
• 4520 audits and reviews completed;
• 76 people charged with serious offences; and
• 46 people convicted for serious offences.[43]

4.37      There is now, in Wickenby's place, a new multi-agency Serious Financial Crime Taskforce (SFCT) that was announced in May 2015. The SFCT will target, through an intelligence led-approach, high risk financial crime by aligning 'the priorities and resources of Commonwealth law enforcement and regulatory agencies'.[44]

4.38      One of the ACC's contributions to the SFCT is the production of a biennial Financial Crime Risk Assessment. These assessments will 'help prioritise the taskforce's work...generate leads and information about criminal targets through [the ACC's] unique intelligence collection and analysis capabilities'.[45]

ACC's key publications

4.39      The ACC continues to provide its flagship publications. The publications include the Organised Crime Threat Assessment, Organised Crime in Australia, National Criminal Target Report, Illicit Drug Data Report and Organised Crime 2025.[46] The details of the publications are discussed below.

Organised Crime Threat Assessment

4.40      The Organised Crime Threat Assessment is the ACC's biennial market based assessment that examines Australia's key illicit markets and activities that enable organised and serious crime. Illicit commodities, financial crimes in the mainstream economy, and crimes against the person are all considered in this assessment, as well as 'activities that enable serious and organised crime, such as money laundering and cybercrime'.[47]

4.41      This classified assessment informs the National Organised Crime Response Plan, which influences law enforcement resource priorities and aligns efforts against organised crime threats. A declassified version of the assessment, the Organised Crime in Australia report, is also released biannually.[48]  

4.42      The annual report notes the next Organised Crime Threat Assessment is due in mid-2016.[49]

National Criminal Target Report

4.43      The National Criminal Target Report provides a thorough picture of threats and risks posed by nationally significant serious and organised crime targets. This year's report provides details on emerging criminal markets and strategic links to government initiatives, including the National Ice Taskforce.  The 2015 report, which is classified, was presented to the ACC Board in June 2015.[50]

Illicit Drug Data Report

4.44      The 12^th edition of the Illicit Drug Data Report (2013–14) provides information on illicit drug related arrests, seizures, purity levels, profiling data and prices.[51] The evidence found in this report assists decision-makers with making strategic decisions to address the threat of illicit drugs. This report is available to the public.[52]

4.45      Findings in the 2013–14 report include:

• a record 93 086 seizures of illicit drugs nationally;
• 27 tonnes of illicit drugs seized, setting a new record weight;
• the median purity of methamphetamine is at its highest on record;
• there were 112 049 national illicit drug arrests;
• a record number of arrests for amphetamine-type stimulants, cannabis, cocaine and steroids; and
• a decrease in the number of clandestine laboratories detected nationally.[53]

Security, integrity and misconduct

4.46      The ACC has dedicated integrity and security teams. These teams promote a strong ethical culture within the ACC, and identify, understand and manage corruption and fraud risks. Staff fraud surveys, assessments of fraud and corruption risks, online training modules, and ongoing staff suitability assessments are all conducted to ensure the ACC maintains a high standard of conduct and integrity.[54]   

4.47      The ACC's Integrity Assurance Team, dedicated to the prevention, detection and investigation of fraud and corruption, received one internal disclosure under the Public Interest Disclosure Scheme. The investigation into this internal disclosure was completed under the Public Interest Disclosure Act 2013.[55]

4.48      In 2014–15, there were two carryover misconduct cases from the previous reporting year. The Integrity Assurance Team during this reporting period investigated six referrals of ACC staff allegedly breaching the Australian Public Service Code of Conduct. As at 30 June 2015, one referral remained under assessment/investigation, three were deemed not to require a formal investigation, one was found to be substantiated, and three were found to be unsubstantiated after an investigation.[56] 

4.49      The ACC also maintains a Fraud and Corruption Control Plan 2015–17. In this reporting period, there was one allegation of fraud, and one allegation of corruption. In these instances, the ACC referred both cases to the Australian Commission for Law Enforcement Integrity (ACLEI). There were no carry-over cases of fraud or corruption from the previous reporting year that remain open with ACLEI.[57]

4.50      The committee will continue to monitor the ACC's security, integrity and misconduct frameworks and internal investigations in the next reporting period, and the effectiveness of measures in place to raise security awareness.

Committee view

4.51      The committee commends the ACC for its vital contribution to Australia's fight against serious and organised crime, both domestically and internationally. The committee is supportive of the ACC expanding its capabilities and intelligence gathering to offshore locations; especially into regions that are known to be the source of illicit materials, such as methamphetamine.

4.52      Domestically, the committee is encouraged by, and welcomes the significant benefits the National Criminal Intelligence System will bring to Australia's law enforcement agencies across all jurisdictions. The committee looks forward to further updates on the development of this system.

4.53      The committee wishes to highlight to the ACC its interest in unexplained wealth legislation and the creation of a national unexplained wealth regime. The committee anticipates further updates of developments in this space.

4.54      Finally, the committee reiterates its support of the ACC's role in Australia's task force operations; namely, Task Force Morpheus, Task Force Eligo and the Serious Financial Crime Taskforce. All of these task forces have disrupted the activities of serious and organised crime groups, outlaw motorcycle gangs, the importation of illicit materials (drug and firearms), and financial crime. These task forces not only disrupt criminal activity, but they also enhance cooperation between law enforcement agencies across jurisdictions. The committee wishes to congratulate the ACC for its contribution to these operations.

Mr Craig Kelly MP
Chair

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