Two alleged members of an organized crime gang have been arrested during police raids after being charged with a $1 million money-smuggling operation involving damaged coins.
A man, 36, and a woman, 37, were seized during riot police raids on homes and businesses in Sydney’s CBD, Haymarket and Strathfield.
The pair were allegedly caught importing damaged Australian coins back into the country, where they then laundered them through smart ATMs.
The alleged scam allegedly raised more than $1 million in the past year, which was then shipped overseas.
The arrests have lifted the lid on the global trade in ‘mutilated’ money – as damaged currency is officially known – which can be lucrative for criminals.
Two suspected members of an organized crime gang have been arrested during police raids after being charged with a $1 million money-smuggling operation involving damaged coins
A man, 36, and a woman, 37, were seized during riot police raids on homes and businesses in Sydney’s CBD, Haymarket and Strathfield
The Royal Australian Mint cracked down in 2004 and stopped paying face value for damaged currency due to growing fears of imported damaged coins.
The Mint now pays face value for currency worn out through normal use, but anything seriously damaged will not be refunded and will simply be withdrawn from circulation.
Mutilated currency can only be returned for scrap value, less a fee for handling, losses and administration.
They are currently offering $9.74 for a kilogram of damaged currency, which means a damaged $1 coin weighing 9 grams is worth less than 9 cents in scrap value.
Due to the ongoing investigation, the Mint has refused requests from Daily Mail Australia to reveal what it does with damaged coins handed to it.
But it is clear that they are collected and must be safely shipped to authorized currency recycling plants.
Poonsang Corp in Seoul, South Korea is the largest supplier of blank coins in the world, but there are other international processing plants in China and India.
The damaged coins – which are sorted into identical denominations – are melted down and forged into strips, from which blank coins are then punched out.
The blanks are then returned to their original country’s Mint where they are ‘topped and tailed’ with the local markings before being returned to circulation.
It’s not clear where the alleged security breach happened in Mint’s process to recycler or if the alleged gang somehow managed to buy them for scrap.
But in June, police were tipped off about large numbers of damaged coins allegedly turning up in the banking system by AUSTRAC’s financial intelligence unit, the Australian Transaction Reports and Analysis Centre.
Detectives then set up Strike Force Gidding to investigate the source and destination of the bulk packages of damaged coins entering the country.
The pair were allegedly caught importing damaged Australian coins back into the country, where they then laundered them through smart ATMs
Police reportedly found several large boxes of rice sacks filled with sealed bags of heavily damaged $1 coins that have now been sent for forensic examination
The alleged scam allegedly raised more than $1 million in the past year, which was then shipped overseas
Working with the Australian Border Force and the Mint, they reportedly found a series of imports marked as belt buckles that were actually damaged $1 and $2 coins.
Another shipment was seized in Port Botany on Tuesday and two more bulk packs of damaged coins were reportedly there, leading to the raids and arrests on Wednesday.
The joint operation involved detectives from the State Crime Command’s organized crime squad and members of the ABF and AUSTRAC.
Police reportedly found several large boxes of rice sacks filled with sealed bags of heavily damaged $1 coins that have now been sent for forensic examination.
The two arrested were charged with handling the proceeds of crime and appeared in local Burwood and Downing Center courts on Thursday.
Police will allege in court that the pair were part of a joint criminal syndicate, which allegedly fraudulently obtained the damaged coins and imported them into Australia.
They claim the syndicate laundered the coins through smart ATMs across Sydney and deposited sums of money into various bank accounts before sending the proceeds abroad.
It is alleged that as of August 2022, the syndicate has fraudulently obtained more than an estimated $1 million through the scheme.
The two arrested were charged with handling the proceeds of crime and appeared in local Burwood and Downing Center courts on Thursday
Police will allege in court that the pair were part of a joint criminal syndicate, which allegedly fraudulently obtained the damaged coins and imported them into Australia.
“This syndicate has reportedly tried to avoid detection by going to several ATMs in Sydney and depositing varying amounts of cash every day,” said organized crime commander Detective Peter Faux.
“The alleged actions of this group demonstrate the intricate ways offshore syndicates are trying to infiltrate our country and extort our financial system.
“As we’ve said time and time again, these groups are all chasing one thing: money. They want the power and control that comes with it, and they don’t care who they cheat to get there.
“We don’t believe the coins are counterfeit, but we don’t think they are legal tender.
“We will continue to work with our partners, including the Royal Australian Mint, to determine the scope of this syndicate.”