CEO Keynote address – International Serious and Organised Crime Conference | Australian Crime Commission

Tue, 30/07/2013

Firstly, I would like to acknowledge the traditional owners of the land on which we meet, and pay my respects to their elders, both past and present.

Minister for Home Affairs and Justice, the Hon Jason Clare, distinguished guests, fellow presenters, ACC Board members, ladies and gentlemen.

Thank you for joining me here today for the second day of the International Serious and Organised Crime conference.

In preparing today’s presentation, I couldn’t  help but think back on how much has changed in the law enforcement and national security landscape, particularly over the past 10 years since the Australian Crime Commission was created.

One of the greatest changes, certainly in the past decade, has been the rate at which technology has progressed and become a part of our everyday-life.

Just as we have seen this rapid technological growth, we have also seen the organised crime market grow and diversify, and find endless ways to exploit traditional and new markets.

Traditional organised criminal activity, such as illicit drug trafficking, fraud and money laundering has become more complex.

We are also seeing an ever-expanding range of new crime markets such as the potential risks associated with carbon trading, new drugs and precursors, wildlife trafficking, resource exploitation and potential vulnerabilities of visa programs, and intellectual property and cyber crime.

Ten years ago we followed criminals’ money to confiscate their assets. Today, we follow the money trail to discover new crime threats, pinpoint high-risk criminals, target money laundering, and identify ways to make it harder for serious and organised crime to operate in Australia.

Ten years ago, law enforcement worked in relative isolation. Today, law enforcement is focussed on working in partnerships, both nationally and internationally.

And ten years ago, Australia was unable to identify the highest threat risks to the nation’s interests. Today, the National Targeting Systemcategorises and lists the most serious organised crime threats to Australia.

And we now know that 67 per cent of our nationally significant serious and organised crime targets are linked to at least one international jurisdiction, with most focused in South-East Asia.

These targets have a detrimental impact on Australia, and are sourcing illicit commodities from overseas including from Asia, Africa, Europe and South America.

Once, encounters with organised crime were largely restricted to those who sought out illicit commodities or illegal activities. Today, any Australian on any day can be impacted.

What used to take a number of people and considerable time to commit a crime against 10 others, can now be committed by one individual against many more from behind a computer screen.

We are seeing increasing incidence of Australian investors falling victim to investment scams as well as credit card or identity fraud.

Equally, the Australian public has also been witness to brazen public shootings, often carried out by Outlaw Motorcycle Gangs.

There are also the less obvious impacts of organised crime:

• Increased public expenditure to support health services to treat illicit drug related illness.
• Small businesses struggling to remain competitive as organised crime actively defies legislative and regulatory strctures.
• Once financially independent families and individuals become dependant on social welfare because organised crime has defrauded them of their life savings.
• And there’s a distorted market in which organised crime can manipulate prices of goods and services for criminal gain.

At the first International Serious and Organised Crime conference in 2010, I spoke about organised crime being the fifth estate—moving into a position of institutional power.

‘Estates’ often refer to four institutional authorities that include the clergy; the nobility,“commoners”, that is; the legislative, executive and judicial branches of government; and the press.

In 2010, I questioned whether in the future, organised crime could, or would, still be considered as the fifth estate—one that rivalled these four institutional authorities, as the most powerful estate of them all.

In these past three years, we have seen the environment change including:

• an exponential increase in funds seized
• growing sophistication of methodologies
• a heightened increase in fraud detections
• growing sophistication of importation methods of firearms and illicit drugs; and
• the international reach of criminals.

This leads me to the hypothesis that organised crime has now moved beyond the fifth estate.

Organised crime is no longer its own institution; it has now moved into every estate, it has pervaded each level of global society.

In some countries, we are seeing organised crime entrenched in the heart of political and economic institutions.

We are seeing the power of organised crime on the streets of Mexico where the scale of extra judicial killings is unparalleled and similar to the destruction caused by a war.

We are seeing organised crime walking the halls of power in failing states.

And in Australia, we are seeing organised crime increasingly hiding clandestine activities through legitimate business enterprises.

Today, more than ever, the affect of organised crime on Australians is unparalleled. It’s pervasive, powerful and complex.

In this environment, where change is the only constant, the Australian Crime Commission has had to continuously adapt and, more importantly, evolve its thinking.

For example, we realised that traditional seizures and arrests are not soley going to make a lasting impact.

As such, we have been moving towards a more holistic approach designed to create a long lasting sustainable impact against serious and orgnaised criminal activity.

This year marks the 10th anniversary of the Australian Crime Commission.

Last night, current and past board members, former ACC CEOs, the Minister for Home Affairs and Justice and others crucial to the history of the agency came together to commemorate the ACC’s 10th anniversary.

Many of those in attendance last night were there in 2002 when leaders decided Australia needed a national body to focus solely on serious and organised criminality.

This brought three separate agencies together—the Australian Bureau of Criminal Intelligence, the Office of Strategic Crime Assessment and the National Crime Authority—a powerful combination of national intelligence and special investigatory capabilities.

A key hallmark of the Australian Crime Commission was, and remains, its Board. The Board comprises the heads of 15 Australian law enforcement, regulatory and national security agencies.

The board is powerful in coordinating a national response to a range of organised crime threats.

The ACC also has specialist coercive powers. It is empowered to conduct special investigations and special operations where conventional law enforcement methods are unable or unlikely to be effective.

In the past 10 years the ACC has contributed to more than 300 disruptions to criminal syndicates and their operations, and achieved more than 700 convictions.

This equates to, on average, 1.2 disruptions per fortnight of significant transnational criminal syndicates with multi-million dollar business operations.

With partners the ACC has worked to keep almost $3 billion in illicit drugs and precursor chemicals off the street.[1]

But this is half the story.

Increasingly, the changing nature of organised crime and the challenges of criminal jurisdiction highlight the need for an intelligence approach focused on prevention and disruption strategies.

Take for example, the ACC money laundering investigation Gordian Katakan in 2005, still Australia’s largest money laundering operation, where six weeks after the principle targets were arrested, the quantum of money being remitted offshore from their criminal associates was greater than ever before.

Charles Darwin said “It is not the strongest of the species that survives, nor the most intelligent … It is the one that is the most adaptable to change,” and to us, that refers to both organised crime and our approach in combating it.

So how do you break the business of organised crime?

To truly have impact, we must first discover and understand the national and international picture of its networks, methodologies, and the full range of vulnerabilities it exploits.

This is done through rich, contemporaneous, and comprehensive criminal intelligence. Building Australia’s intelligence picture and identifying organised crime trends and weaknesses is the ACC’s core business.

An ACC Special Intelligence Operation is about understanding risk, threat and vulnerability and finding solutions to target harden the environment from serious and organised crime.

In the case of Project Aperio’s Special Intelligence Operation, the ACC looked at a portion of the Australian sporting industry.

We looked at it through a similar lens that we would look at the financial sector or any other sector where we have done bodies of work. We looked at the sporting industry for what it is—a multibillion dollar industry, employing thousands of people in this country.

Making the findings of Project Aperio public on  7 February 2013 gave Government, sporting codes and the public an opportunity to prevent organised crime from infiltrating professional sport in Australia. And it’s working.

Another example of intelligence-led work is the ACC’s Task Force Galilee.  We had intelligence of 2600 Australians with losses in excess of $113 million. This crime was being committed off-shore.  Traditional law enforcement efforts were being frustrated.

These organised crime groups have established a sophisticated business model. They rely on global inconsistency around legislation and jurisdiction and target developing countries from which to perpetrate their crimes.

Most callously, they target the elderly at a time when they should be enjoying their retirement.

In response, Task Force Galilee brought together approximately 20 agencies to put together a multi-layered response.

An important component was a public awareness campaign which included holding industry briefings, lauching a public report with the AIC to provide a picture of the threat.

And, for the first time in law enforcement history, we partnered with Australia Post and sent a letter to every household in Australia warning them about this criminal activity and providing information on how to avoid becoming a victim.

Market research undertaken following this campaign indicated increased public awareness and preventative behaviour from the public and high-risk groups when approached or targeted by investment fraudsters.

Task Force Galilee has also had some successful operational outcomes, a huge feat when working across international borders.

The most recent outcome occurred in April, when following a referral from the ACC, Thai authorities raided a suspect business premises in the central business district of Bangkok.

During the raid, Thai authorities located nine foreigners as well as a number of Thai nationals. A range of incriminating evidence including telephones, call scripts, client lists and computer equipment were also located and seized.

The criminal syndicate responsible had engaged a plethora of professional advisers located around the globe to assist their fraudulent behaviour ranging from corporate consulting firms to company incorporation and taxation advisers.

Using a sophisticated website, supported by fraudulent prospectuses and the illegal use of company brands, the syndicate was able to sell non-existent shares in more than 20 companies.

The complexity of the syndicate’s operations allowed it to successfully target victims in 19 countries across the world.

The Australian Crime Commission estimates that the operation had generated at least A$45 million from Australian-based victims alone.

Project Aperio and Task Force Galilee are prevention-driven disruption strategies—and are key examples of where we are headed in the future.

We’ve also done preventative work on carbon trading; the maritime environment; public/private sector corruption; pre-cursor chemicals; and Indigenous communities.

This year we also released the National Cybercrime Intelligence Assessment, a classified document that provides law enforcement and government with a greater understanding of the threat posed nationally by cyber criminals.

This assessment helped inform the National Plan to Combat Cybercrime, which was launched here yesterday.

The ACC is also providing direct support to the Australian Cyber Security Centre to ensure that this intelligence is harnessed by the ACC and its partners to fight this organised crime.

Further, last year the ACC Board authorised the Eligo National Task Force, which involves the regulator AUSTRAC and was formed to address criminal vulnerabilities within the alternative remittance sector, including the potential for exploitation by serious and organised crime.

Within six months of the Task Force being operational, it had disrupted several global money laundering and drug networks.

Work is still ongoing; however I’m positive we will be seeing significant results over the coming months.

Couple this with the preventative work the Task Force is doing with AUSTRAC, along with our joint educational activity within the alternate remittance sector, and we are confident of making a long term difference.

This leads me to data sharing, intelligence sharing, and why it is so important to law enforcement today.

In the past 10 years the ACC has produced over 1700 unique analytical intelligence products and disseminated more than 34 000 strategic, analytical and tactical intelligence products to our partners.

This intelligence enables a wide range of traditional criminal justice responses as well as preventative or disruptive actions.

Since I last spoke at this conference in 2010, 90 per cent of all the data in the world has been created.[2]

Big data[3]is essentially a collection of data sets so large and complex that it becomes difficult to process using traditional data processing applications.

This is both a challenge and a weapon for law enforcement.

Big data analysis played a large role in Barack Obama‘s successful 2012 re-election campaign.[4]

Australia needs big data, but collating this data, determining who owns it, who has access to it and who can use it, is one of our challenges.

Data, on its own, is of little use to law enforcement. It’s only when we pull the data together, analyse it and make links, that the real discovery and prevention can happen.

Law enforcement’s ability to ‘connect the dots’ is a major weapon in the fight against serious and organised crime and provides the lifeblood for wide-ranging strategies and investigations.

Pooling together data resources, connecting the dots, and collecting, assessing and sharing criminal intelligence with our partners is the ACC’s core business—a key prevention strategy.

It protects our citizens and empowers law enforcement.

The National Criminal Intelligence Fusion Capability, for example, brings together people, technology and data—integrating and expanding the number of public and private industry datasets with our criminal intelligence, to identify patterns of crime and money flows.

Since 2010, Fusion has identified over 70 previously unknown criminal threats to the Australian community, including a significant number of high-threat criminal targets. This enables law enforcement to act on unknown threats.

But we want to achieve more.

Over the coming years the ACC will develop its data collection capabilities to ensure Fusion outputs drive law enforcement operations through a clear and comprehensive picture of serious organised crime.

We increasingly want to use big data to prevent crime. Every time a high risk target moves money, registers a company, buys a storage shed, moves out of the country or imports goods we want to know about it.

Criminal intelligence combined with data is a powerful weapon in the fight against serious and organised crime.

The more intelligence regarding serious and organised crime activities, methods and emerging areas of influence that is available, the more effective Australia can be in disrupting and preventing criminal syndicates, hardening Australia’s environment and protecting the community.

In the modern era, this also means partnering with law enforcement and Government, as well as private industry.

The ACC doesn’t do anything, unless it is with or for our partners. The way law enforcement works together today, the collaborative nature, is unprecedented.

And as a result of recent legislative changes to the Australian Crime Commission Act, the ACC now discloses information to private industry. Over the past year we have done this in a range of sectors.

Disclosure of ACC information to the private sector allows specific industries to harden business practices against serious and organised crime.

We want to work with industry to use the Commission to build a strong understanding of risk and threat;  to strengthen practices and ultimately make it difficult for organised crime to operate in Australia.

This is also about a whole-of-community approach. The public are now key players in the fight.

In the past 12 months the Crime Commission has released more fact sheets on crime markets, a public organised crime and drugs in sport, the Illicit Drug Data Report 2011-12, and today the Minister for Justice will release the most authoritative unclassified report on organised crime titled ‘Organised Crime in Australia 2013’ to the media and the broader community.

These public reports complement a range of classified publications the ACC produces, providing our partners with a comprehensive picture of organised crime in Australia—the ‘who’, ‘what’ and ‘how’ of serious and organised crime in Australia.

Data and criminal intelligence is the key that unlocks our ability to prevent criminality.

I am the first to admit that this journey I have just spoken about, the journey into an intelligence-led approach and into a preventative-led approach will be a challenge for law enforcement. It’s hard—it goes against every principle that I was trained in as a police recruit where we were told to look for evidence of a crime.

Added to this problem is the fact that prevention does not sell. How do you measure something that you prevented, compared with the number of people arrested or prosecuted the drugs and money seized?

How do you measure the fact that you have prevented $200 million worth of fraud from the Australian community?

Well, we are working on the answers to those questions too.

ASIO Director General David Irvin has said, “ASIO’s successes are mostly unheralded or, if they have been made public, soon forgotten. We remember the bomb that went off, not that one that was defused”.

Prime Minister Kevin Rudd, also referred to this statement while opening the new ASIO building last week.

The Australian Crime Commission has faced a lot of criticism from some corners about this approach. However, 96 per cent of 81 stakeholders, surveyed as part of the ACC’s most recent stakeholder research finalised in the last week, believe the ACC contributes to a reduction in the threat and impact from serious and organised crime.[5]

What is clear, is that all of the intelligence, all of the evidence, and all of the facts point to prevention and disruption of serious and organised criminals will only come with a two pronged attack—criminal justice responses combined with disruption or prevention activities.

Without prevention, no matter how many police or how many resources are provided to combat it, serious and organised crime will be a constant.

I want to leave you with this one last thought. Would you rather be defrauded of your life savings—say $250 000—and hopefully have the perpetrator arrested and prosecuted and potentially the money returned? Or would you rather not be the victim of fraud at all?