source : the age
When police raided the gang’s stash house, hidden inside a row of housing commission units, they expected to find money and drugs.
But the $3 million Richard Mille watch was a surprise, especially nestled in a collection of 10 other showstoppers including Rolexes and Audemars Piguets.
Total value? Somewhere north of $10 million in titanium, gold and diamonds.
They might not be the typical clientele of luxury boutiques, but underworld bosses are spending big on luxury – from Richard Mille watches to Prada handbags.Credit: Aresna Villanueva
Just days before that bust in Sydney’s west, police in Melbourne raiding a hydroponic drug lab had stumbled upon another treasure trove, this time of designer handbags. It was a roll call of Hermes, Prada, Louis Vuitton and Dior– and part of a growing trend in the underworld.
Turning dirty cash into luxury goods has long been a popular trick to “clean” the proceeds of crime. But high-end assets such as watches, bags and jewellery have now become a currency of their own among crooks, traded between gangs or sold on to them by smaller players.
“They use it like a commodity – it’s cash on your wrist,” says one underworld source. “You can sell it, trade it, use it as collateral. These kinds of flash high-end watches always go up in value.”
Many luxury stores still have cash-counting machines for large cash purchases.Credit: Justin McManus
Acting Sergeant Richard Smith, who heads a Victoria Police team focused on retail theft in Melbourne’s CBD, says major burglaries targeting high-end stores often have links to organised crime, with luxury goods now exchanged for drugs.
When they travel – or even appear before court – crime crews are often remarkably well dressed, flashing solid-gold Rolexes, Hermes belts and diamond ear-studs.
Underworld sources speak of “watch shopping sprees” through Melbourne and jewellery collections hidden under the floorboards of mistresses’ homes, and of paying other gangs for “services”, such as transporting drugs, in handbags and watches.
“Moving hundreds of thousands of dollars can be as simple as buying a watch or handbag and getting on a plane,” says one. “You can take it to Dubai and sell it, put the money in an account. If you’re worried about someone asking questions about where it went when you come back, you buy a really good fake as cover.”
Detectives seized hundreds of thousands of dollars’ worth of rare Lego sets, still in their original packaging, at a Melbourne drug lab in late 2023.Credit: Victoria Police
Nick McTaggart was one of Australia’s most senior police officers investigating money laundering until retiring to become a consultant in 2016. He says luxury goods are being used more than ever to launder cash and trade illicit goods because “criminals are rolling in more money than ever”.
“But gone are the days where you could say it was [from] your grandmother’s funeral,” he says. “You only have so many grandmas.
“Now, it’s not even about following the money. What matters is what the money buys.”
The recent leaders of Australia’s organised crime gangs have largely fled overseas, and McTaggart says luxury watches and the like, retailing at $1 million plus, are easy ways to ferry the proceeds back to the bosses.
Authorities track transactions of more than $10,000 leaving Australia – and $1 million in cash weighs considerably more than Rolexes in plane carry-on. But the tripwires for luxury goods are less clear.
The AFP has seized diamond-encrusted Rolexes and designer handbags worth millions.Credit: AFP
It is tricky, too, for police to distinguish between luxe items bought to clean money and those bought to revel in having it.
A Louis Vuitton handbag seized by the AFP.Credit: AFP
Police seized hundreds of thousands of dollars’ worth of Lego at a recent Victorian raid, for example, written off as an extravagance by a drug crew. But one investigator notes: “Lego holds its value. It’s a good investment.”
McTaggart says “crooks don’t buy junk”, they buy what will appreciate in value, from Lamborghinis to collectibles.
“They’re not just thinking about their wealth any more, but the third, fourth, fifth generation of their family,” he says.
Certain brands will come into vogue, especially as celebrity sponsorships flood social media, but the tastes of the underworld can be hard to divine.
On display at a recent police auction of seized goods in Melbourne was a red sports car, top-shelf liquor, golf clubs and chainsaws, alongside rare Lego sets and a mobile dog-washing unit.
Australia’s anti-money laundering regulator, AUSTRAC, says luxury goods now rank among the most high-risk channels because they are easily obtained and transported across borders.
New national laws are finally set to crack down on other favoured laundering avenues such as real estate and offshore trusts. But while “precious stones and metals” are covered – meaning diamond jewellery and some watches – other luxury goods such as designer handbags will slip the net.
Australian Border Force says trade-based laundering “has emerged as a growing global threat as [authorities] have strengthened anti-money laundering laws”.
Border Force is seizing “at an increasing rate, a significant number of high-value commodities and luxury goods”, a spokesman said. One recent catch at the border, a $2 million Patek Philippe watch, is yet to be auctioned off.
The $2million dollar Patek Philippe seized by Border Force.Credit: Australian Border Force
Some experts, including McTaggart, say laws are failing because they focus on compliance rather than crime, and police need more resources to hunt the syndicates specialising in money laundering.
Underworld bosses aren’t sitting on eBay to offload their handbags and Lego kits.
“They’ve created their own market,” says one source.
“They know where to sell things, where people looking to skip the queue for a Hermes bag can walk in and put down $100k, no questions asked.”
McTaggart says that sometimes it’s as simple as selling second-hand to a reputable store.
Just as they do when cleaning dirty money through flash cars and real estate, crooks will put proxies on their ownership records.
“But there’s a way to catch them,” McTaggart says. “They always have an insurance policy on everything – in their own name.”
The Australian Federal Police calls money laundering the lifeblood of the underworld, funding more violent crimes and lavish lifestyles.
Data provided by police shows the AFP’s anti-money laundering taskforce seized more than $153 million in assets last financial year, including more than 100 luxury items.
While the days of officers scooping bargains at police-only auctions are over, some “quirkier items” recently put up for public sale, according to a Victoria Police spokesman, include a rare Chinese musical instrument and underwear.
“We strictly sell unworn undergarments,” the spokesman insisted.
