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Money transfer cartel sent cash and received jail time

06 July 2022

7 min read

#Competition & Consumer Law, #White Collar Crime & Regulatory Investigations

Published by:

Kayla Plunkett

Money transfer cartel sent cash and received jail time

In an Australian competition law first, four individuals recently received prison sentences for criminal cartel conduct after fixing foreign exchange rates and fees despite being employed by competing money transfer businesses.

Following a joint investigation by the Australian Competition and Consumer Commission (ACCC) and Australian Federal Police (AFP), the Commonwealth Department of Public Prosecutions (CDPP) brought proceedings against Vina Money Transfer Pty Ltd (Vina Money) and five individuals. Two directors and/or employees of Vina Money and two directors and/or employees of their competitor Tin Vuong Pty Ltd trading as Hong Vina Fast Money Transfer (Hong Vina) pled guilty, while the fifth person accused of involvement in the cartel has pled not guilty.

The CDPP alleged that between 2011 and 2016, Vina Money had breached section 44ZZRG (then in force) of the Competition and Consumer Act 2010 (Cth) (CCA) by making and giving effect to contracts, arrangements or understandings that contained a cartel provision in relation to exchange rates and fees for money transfers to Vietnam. The five individuals were charged with being knowingly concerned with some or all of the conduct under section 79 of the CCA.

While the individuals who pled guilty were immediately released, they now have criminal records for this conduct and are subject to recognizance release orders (i.e. good behaviour orders) for a period of between one and a half to three years.

Clearly, criminal consequences for cartel conduct are real and it cannot be overstated how important this case is in the context of Australia’s competition law enforcement landscape.

Court proceedings

Vina Money and Hong Vina, as well as a third money transfer business Eastern & Allied Pty Ltd trading as Hai Ha Money Transfer (Hai Ha), operated shopfronts in Sydney and Melbourne which were in close proximity to each other.

Their businesses transferred money belonging to customers in Australia to recipients in Vietnam. Funds were delivered in Australian dollars (AUD) or Vietnamese dong (VND), and currency conversion was required where the latter was chosen. The businesses set the exchange rate from AUD to VND at the start of each day.

These exchange rates were displayed in the branches, visible through windows and on changeable street signage outside the branch. Because of this practice, customers could easily compare rates between businesses which created an intensely competitive environment.

When customers requested delivery of funds in VND, the exchange rate was applied to convert the funds from AUD to VND and the customers were charged additional service and transaction fees. The funds were then transferred to accounts at a large commercial bank in Vietnam named Sacombank SBR (Sacombank).

Due to the time difference between Australia and Vietnam, Sacombank did not commence trading until 11am AEST, so each day the Sacombank wholesale rate would not be known with certainty until that time. As a result, profits or losses could occur where the wholesale rate offered by Sacombank was different to the rate offered by the businesses at the time of the customer’s transaction.

Following encouragement by Sacombank to collude with each other in fixing the rates they offered, Vina Money, Hong Vina, and Hai Ha communicated via a series of emails, SMS messages, and telephone calls seeking to agree on the same exchange rate and devise a process for communicating the agreed rate. The businesses subsequently gave effect to this agreement for a period of five years.

At the time the charges were laid, then Chairman of the ACCC, Mr Rod Sims, emphasised the seriousness of the conduct, noting that the World Bank estimated that in those five years, remittances from Australia to Vietnam totalled about $700 million a year. Mr Sims commented that:

“This alleged behaviour is extremely serious and relates to over two thirds of all the number of money transfer transactions, and almost a quarter of the amount of money transferred, from Australia to Vietnam during the relevant period.”

After the Australian Criminal Intelligence Commission lawfully intercepted communications between two of the individuals, the AFP and the ACCC began a joint investigation into the cartel in 2014 before referring the case to the CDPP for criminal prosecution.

Hai Ha’s director also participated in the cartel arrangement but was given immunity from prosecution after agreeing to give evidence for the Crown.


The Federal Court handed down sentences ranging from nine months to two and a half years for the individuals but the individuals were immediately released subject to recognizance release orders, meaning they will not serve any actual time in prison unless these orders are breached. Vina Money also received a one million dollar penalty.

In arriving at its decision, the court contemplated the objective seriousness of the offences, classifying the conduct as serious but in the low to moderate range of offending. This finding was based on conduct being deliberate and repeated, which required at least a degree of sophistication, planning and cooperation involved. Additionally, the court highlighted the conduct was for financial gain as the cartel was long-running (i.e. conducted over a five-year period) and effective, which influenced the market adversely to consumers and advanced the interests of the businesses and individuals.

The court considered that the nature of cartel offences meant that general deterrence was of particular importance and therefore, the offenders’ personal factors were afforded less weight than they otherwise might be. Nevertheless, the individual’s guilty pleas, cooperation with authorities, lack of prior convictions, evidence of contrition and remorse, good character and good prospects of rehabilitation were weighed by the court in reaching its decision.

It’s important to note the proceedings still remain on foot with a fifth person accused of involvement in the cartel pleading not guilty and due to go to trial in late August.

Cartel conduct

The CCA requires businesses to compete fairly. While most Australian businesses increase their customer base and profits honestly, businesses that are struggling to compete fairly and maintain profits may be tempted to deliberately set up or join a cartel with their competitors.

The CCA not only prohibits cartels under civil law, but makes it a criminal offence for individuals and corporations to participate in a cartel, as it was in this case. Individuals could face up to 10 years in jail, fines of up to $444,000 for criminal cartel conduct offences and a pecuniary penalty of up to $500,000 per civil contravention. Corporations will be penalised the greater of $10 million, three times the benefit reasonably attributable to the cartel, or 10 per cent of the company’s annual turnover in the preceding 12 months.

The risk is real as this case is the second joint investigation with the AFP which has led to criminal cartel charges with these links likely to increase the ACCC’s effectiveness in enforcing penalties for cartel conduct.

Cartel conduct remains a critical component of the ACCC’s competition portfolio, and an enduring compliance and enforcement priority due to its potential detriment to consumer welfare and the competitive process.

While recent proceedings have not gone the way the ACCC had envisaged, this result will likely be the catalyst for emboldened action, and individuals and businesses engaging in cartel conduct will be walking the wire.

How can we help?

What was clear in this case was that the court was critical of the individuals’ lack of training in competition law and their ignorance of the law they have contravened. Our team can assist you in understanding the prohibitions against cartel conduct and other restrictive trade practices under Part IV of the CCA. In particular, we can assist in considering the risks associated with contracts, arrangements or understandings between competitors.

Our team can also assist you with conducting competition law compliance training for your staff to ensure they are aware of their obligations and are not ignorant of the serious consequences associated with cartel conduct. If you have any questions, please contact us below or get in touch with our team here.

Authors: Joanne Jary & Kayla Plunkett

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Kayla Plunkett

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