Fraudsters continue to target super


By Kate Kachor

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The incidence of fraud involving Australia’s $1.5 trillion superannuation pool could be significantly higher than previously forecast, according to an Australian Crime Commission (ACC) report.

The ACC report, “Organised crime in Australia 2013”, found law enforcement activity and intelligence suggested “organised criminal involvement in superannuation fraud in Australia may be more significant than previously thought”.

“Traditionally, the greatest threat to superannuation savings was believed to have come from opportunistic individuals involved in the operation or administration of funds, such as employees and service providers,” the report, released yesterday, said.

“Now well-resourced and sophisticated international organised fraud networks and groups have been known to actively target the Australian superannuation sector, drawn by the very large pool of compulsory superannuation savings currently amassed.”

The 75-page report said given superannuation assets were projected to rise to $7 trillion or 130 per cent of Australia’s gross domestic product over the next 25 years, organised crime related to super could have “significant impacts on Australian superannuants, the government and the economy”.

“Consequently, addressing organised criminal exploitation of the superannuation industry is a priority for law enforcement,” it said.

The ACC estimated organised crime cost the Australian economy $15 billion a year, the report said.

The report highlighted the 2011 collapse of Trio Capital as an example of “sophisticated methodologies that these fraud networks employ”.

The loss of more than $100 million in investor and superannuation funds in the Trio collapse remains the largest superannuation fraud in Australian history.

“Individual Australians are being targeted for mass-marketed fraud, including ‘boiler-room’ or cold-call investment fraud, and Ponzi schemes, with organised crime also seeking to exploit and manipulate the legitimate securities and share market for criminal gain,” the report.

“These financial crimes are emerging as an important threat, and have the potential to do significant harm to the Australian economy and the Australian community.”

The ACC released the report to create awareness among Australians about organised crime so the federal government, law enforcement, public and private sector agencies and business sectors could “increase their awareness of the problems and risks, and work together to combat the threat”.

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