Four people involved in running remittance businesses have received prison sentences for fixing foreign exchange rates and fees – an Australian competition law first.
Following an investigation by the Australian Competition and Consumer Commission and the Australian Federal Police, the Commonwealth Director of Public Prosecutions brought criminal proceedings against directors and employees of Vina Money Transfer Pty Ltd and Tin Vuong Pty Ltd (trading as Hong Vina Fast Money Transfer).
Both companies provided a service transferring money between Australia and Vietnam and were, ostensibly, competitors.
When customers required delivery of funds to Vietnam in Vietnamese dong, the funds were transferred to counterparties with accounts at a Vietnamese commercial bank, Sacombank SBR. Both companies had relationships with Sacombank.
Because of time differences, the Australian businesses traded for some time each morning without knowing the wholesale rate Sacombank would offer that day. To overcome the risk of loss on currency exchanges the companies colluded to agree on the same rate.
They also agreed to fixed their fees and any fee discounts for larger transfers.
They did this from 2011 to 2016, until their communications were intercepted by the Australian Criminal Intelligence Commission, and the AFP and ACCC began their investigation.
In a judgment handed down last month, the Federal Court sentenced the four to prison sentences ranging from nine months to two-and-a-half years. All four were released subject to recognisance release orders (good behaviour bonds).
Vina Money was also ordered to pay a A$1 million fine.
The ACCC estimated that remittance from Australia to Vietnam was worth $700 million a year during this period, with the two companies accounting for about a quarter of that amount.
The court said it imposed prison terms because the conduct was “deliberate and repeated”. It said the conduct “influenced the market adversely for consumers and advanced the interests of the businesses”.
The judgment said: “It was apparent during the sentencing hearing that some submissions did not grapple with the seriousness of the offending. Some submissions failed to properly recognise that this conduct is charged as criminal conduct.
“Vina Money and Ngoc Lee, in particular, approached their submissions as if their conduct was a necessary part of business and advantageous to customers.”
While the four people sentenced all pleaded guilty, a fifth person representing a third company accused of involvement in the cartel pleaded not guilty and is due to go on trial later this year.