International Student Sues Commonwealth Bank for Money Laundering Scam

An Indonesian student and her family sued the Commonwealth Bank as they lost millions of dollars in cuckoo smurfing

Delania Marundrury is enrolled in a make-up design course and living with her family in Australia. They have been receiving funds from their hometown to support Delania’s education, buy land and build a house. The family’s millions of funds were seized by the Australian Federal Police (AFP) after an investigation that concluded that their bank account was being used by the money launderers to route out illicit gains outside Australia. In return, the family stated that they had no clue how they became the target of a scam known as ‘cuckoo smurfing’.

Delania had been transferring the funds to a money exchange, whose fee was lower, believing that their money was being deposited into their Commonwealth Bank account. However, instead of keeping cash into the CBA account, the money changer was holding their money and was depositing the criminals’ illicit earnings into their account, then the clean funds were transferred to overseas fraudsters’ sources. Once the AFP found out about the suspicious activities, everything in the account was frozen in suspicion of money laundering. The family also said that they wouldn’t continue to place money if they had been aware of being used by money launderers.

The family has accused the Commonwealth Bank of anti-money laundering compliance failing, as they did not report the suspicious activity to AUSTRAC. However, all the financial institutions, as well as the non-financial businesses, are obliged to report cuckoo smurfing scams and other fraudulent schemes to the financial watchdog.

The Marundrury said that Commonwealth Bank holds social responsibility as well as regulatory obligation to secure clients and eliminate the money laundering activities, but failed to do so. According to the family’s lawyer, they were victimized thrice in Australia, first by money launderers, then by AFP, and lastly by the Commonwealth Bank. Ms. Delania Marundrury claimed law enforcement bodies viewed them as easy targets and took their legit money without being charged with any crime or doing money laundering. 

After this incident, the Commonwealth Bank lodged an application regarding this matter before it was rejected by the Federal Court Judge Mark Moshinsky. The CBA argued that under AUSTRAC obligations, they didn’t disclose AML activities to anyone besides the authorized law enforcement department. Therefore, Moshinsky said he will give both parties four months to collaborate with AUSTRAC chief executive Nicole Rose to ask her to use her control to permit Commonwealth Bank to further discuss the cases of money laundering scams.

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