Protecting Wealth: Preventing Financial Crime in Superannuation, Insurance & Investments

Australia’s financial sector holds vast assets across superannuation, insurance, and managed investment funds, forming a crucial pillar of national economic stability and wealth accumulation. With trillions of dollars under management, these financial instruments support the retirement, security, and investment growth of millions of Australians. However, their scale and complexity also make them a prime target for fraud, scams, and financial crime, necessitating stringent oversight and proactive risk management strategies.

These sectors form the backbone of Australia’s financial system, underscoring the importance of robust financial crime prevention measures and regulatory oversight. Regulatory frameworks are evolving under the AML/CTF Amendment Bill 2024 and the Scams Prevention Framework Bill 2025, introducing new compliance obligations and enforcement measures.

This knowledge article explores the key risks associated with superannuation, insurance, and investment products, providing insights into various financial crime typologies, including fraud, money laundering, insider trading, market manipulation, cybercrime, and regulatory breaches, along with real-world case studies and regulatory trends. It also outlines proactive strategies for mitigating financial crime risks, ensuring compliance, and strengthening customer trust through enhanced due diligence, transaction monitoring, and cross-sector collaboration.

Financial Crime in Superannuation, Insurance, and Investments

Superannuation funds, insurance providers, and investment products are increasingly being exploited by fraudsters, money launderers, and cybercriminals. Recent data highlights the severity of the issue:

• According to The Australian Competition and Consumer Commission (ACCC) Scamwatch, Australians lost over $2.74 billion AUD to scams in 2023, with investment, superannuation, and insurance fraud accounting for a material portion (ACCC).
• The Australian Securities and Investments Commission (ASIC) reports indicate that fraudulent investment schemes, market manipulation, and unregulated financial operators have cost Australians millions in losses across superannuation, insurance claims, and investment fraud (ASIC).
• AUSTRAC has identified vulnerabilities in the superannuation sector that can be exploited for money laundering. For example, in its 2022 Superannuation CTE Update, AUSTRAC detailed a case where rollovers and severe financial hardship claims were used to move potentially illegal funds through superannuation accounts (AUSTRAC).

Key Financial Crime Typologies Affecting Superannuation, Insurance, and Investments

Identity Theft & Account Takeovers

Cybercriminals gain access to accounts in superannuation, insurance, and investment platforms to siphon funds before detection. A notable example is the 2024 Philippine call center superannuation scam, where unauthorised withdrawals were facilitated, leading to significant retirement savings losses (ABC).

Phishing, Social Engineering & Cyber Fraud

Fraudsters impersonate government agencies, financial advisers, or fund administrators to steal login credentials, authorise fraudulent transactions, or manipulate investor behavior. In 2024, Australian superannuation funds experienced a 208% surge in cyber fraud attempts, with phishing attacks leading to unauthorised access and withdrawals (Aware Super).

Investment Fraud, Ponzi Schemes & Market Manipulation

ASIC has prosecuted multiple cases involving scammers who targeted SMSFs and retail investors, promising high-yield investments that never materialised. A recent example is the 2025 United Global Capital (UGC) case, where investors were directed into unregulated investments with Falcon Capital, resulting in financial losses and a revoked license for UGC (The Australian).

Money Laundering via Financial Products

Criminal syndicates exploit superannuation rollovers, life insurance payouts, and high-value investment vehicles to move and obscure illicit proceeds. AUSTRAC has identified a rising trend in superannuation and investment-linked money laundering, with increasing use of offshore accounts and shell companies to integrate illicit funds into the financial system (AUSTRAC).

Insurance Fraud & Regulatory Violations

Fraudulent insurance claims, including exaggerated disability claims and staged accidents, are a significant concern in Australia. The Insurance Fraud Bureau of Australia (IFBA) estimates that insurance fraud costs the industry up to $2.2 billion annually, potentially impacting premiums for honest policyholders (IFBA Intelligence).

AML/CTF Amendment Bill & Scams Prevention Framework Bill

The Australian government has introduced significant legislative reforms to combat financial crime, enhance regulatory compliance, and strengthen protections for consumers and financial institutions. The AML/CTF Amendment Bill represents a major overhaul of Australia’s anti-money laundering and counterterrorism financing framework, expanding regulatory obligations to new industries and increasing penalties for non-compliance.

Simultaneously, the Scams Prevention Framework Bill aims to curb the rising threat of financial fraud, investment scams, and cyber-enabled crimes by mandating stronger security measures, data-sharing protocols, and industry-wide accountability.

These reforms mark a critical shift in how financial institutions, businesses, and regulatory bodies must address emerging risks, with a heightened focus on compliance, fraud detection, cybersecurity, and consumer protection. Below is a breakdown of the key provisions under each legislative framework.

AML/CTF Amendment Bill: Strengthening Compliance

• Expansion to High-Risk Professions: Real estate agents, accountants, and legal professionals are now included under AML/CTF obligations.
• Stronger Regulatory Action Against Financial Crimes: Increased penalties for financial institutions failing to implement proper financial crime controls.
• Repeal of the Financial Transaction Reports Act 1988: Reporting obligations are consolidated under the updated AML/CTF framework.
• Enhanced Reporting to AUSTRAC: Financial institutions, superannuation funds, and investment firms must submit more detailed reports on suspicious transactions, fraud attempts, and compliance breaches.

Scams Prevention Framework Bill: Tackling Scams Proactively

• Mandatory Fraud & Scam Detection: Banks, telecom providers, and digital platforms must implement enhanced security and scam prevention measures.
• Cybersecurity & Digital Protection: Companies must implement stronger cybersecurity practices to prevent financial data breaches and identity theft.
• Enforcement & Penalties: Non-compliance can result in penalties of up to $50 million AUD, reinforcing accountability.
• Consumer Compensation Mechanisms: Victims of financial crime may seek restitution if financial institutions fail to implement adequate protection measures.

The upcoming AML/CTF Amendment Bill and Scams Prevention Framework Bill will bring significant regulatory changes that will reshape how the superannuation, investment, and insurance industries detect, prevent, and respond to financial crime. The expansion of AML/CTF obligations will increase compliance burdens for financial service providers, requiring enhanced customer due diligence (CDD), transaction monitoring, and reporting mechanisms to prevent illicit financial flows. Superannuation funds, investment firms, and insurers will need to strengthen identity verification protocols and implement more sophisticated fraud detection technologies to combat evolving digitally enabled financial crime.

Additionally, the Scams Prevention Framework Bill will mandate that financial institutions and digital platforms take proactive measures to detect and block fraudulent transactions, increasing their liability for failing to prevent scams. This shift will demand greater investment in fraud and scam prevention technology, cross-industry data-sharing initiatives, and internal risk assessment frameworks.

As enforcement actions and penalties rise, companies failing to meet these new regulatory standards will face hefty fines and reputational damage, making financial crime prevention a business-critical priority.

Real-World Examples – Financial Crime in Superannuation, Insurance, and Investments

Case Study 1: Mayfair 101 Investment Scandal

In 2021, the Australian Securities and Investments Commission (ASIC) took action against the Mayfair 101 Group for misleading advertising related to their financial products. The Federal Court found that Mayfair 101 misrepresented their high-risk products as comparable to bank term deposits, leading to significant investor losses. The Court imposed a combined penalty of $30 million AUD on four Mayfair 101 companies (ASIC).

Lesson Learned: This case underscores the importance of regulatory oversight in identifying and shutting down unlicensed investment schemes before they cause widespread damage.

Case Study 2: myGov Account Breach & Superannuation Fraud

In 2020, cybercriminals exploited vulnerabilities in the myGov system and Australian Taxation Office (ATO)-linked superannuation accounts, resulting in unauthorised early withdrawals. Scammers used personal information to set up fake myGov accounts, enabling them to fraudulently access superannuation funds intended for COVID-19 financial relief. Authorities investigated incidents where attackers established fake myGov accounts in victims’ names to facilitate these unauthorised withdrawals (ABC).

Lesson Learned: Strengthening identity verification and implementing multi-factor authentication (MFA) are crucial steps in protecting online superannuation and investment accounts from unauthorised access.

Case Study 3: Operation Pegasus – NDIS Fraud Syndicate

In December 2020, the Australian Federal Police (AFP), in collaboration with the National Disability Insurance Agency (NDIA), AUSTRAC, and Services Australia, launched Operation Pegasus. This operation targeted a criminal syndicate in Western Sydney that fraudulently claimed over $5.8 million AUD from the NDIS. The syndicate operated through multiple companies, submitting false claims and exploiting the system for personal financial gain. In April 2021, AFP officers conducted search warrants across Sydney, resulting in the arrest of several individuals and the seizure of assets, including cash, gold bullion, luxury vehicles, and cryptocurrency. By November 2024, key members of the syndicate received prison sentences for their roles in the fraud (Australian Federal Police).

Lesson Learned: This case underscores the importance of robust inter-agency collaboration and intelligence sharing to detect and dismantle complex fraud operations targeting public welfare systems.

Case Study 4: Superannuation Hardship Scam

In 2024, a 39-year-old woman from Perth was jailed for fraudulently obtaining over $202,000 AUD through false superannuation hardship claims. Over 13 months, she submitted 30 false claims for herself and 24 others, manipulating the system to receive multiple payments. The Australian Federal Police (AFP) uncovered the scheme, leading to her conviction and imprisonment (News.com.au).

Lesson Learned: Regular audits and stringent verification of hardship claims are vital to maintain the integrity of superannuation systems and prevent fraudulent activities.

These case studies illustrate the diverse methods employed in financial fraud and underscore the critical need for robust security measures, regulatory oversight, and inter-agency collaboration to protect individuals and institutions from such fraudulent activities.

Conclusion & Execution Perspective

The evolving risk landscape in superannuation, insurance, and investments demands a multifaceted approach to security, risk mitigation, and regulatory compliance. However, understanding these challenges is only part of the equation – successful execution requires deep expertise in translating regulatory requirements into operationally effective programs that deliver real-world impact. With financial crime becoming more sophisticated, industry players must not only strengthen financial crime detection mechanisms but also implement proactive risk management frameworks, cross-industry collaboration, and digital advancements to safeguard financial assets.

Industry participants must act now to implement advanced fraud and scam detection systems, enhanced customer due diligence (CDD) protocols, real-time transaction monitoring, and cross-sector intelligence sharing. Additionally, with increasing regulatory scrutiny, companies must invest in digital resilience, advanced identity verification tools, and financial crime prevention strategies to maintain compliance, protect customers, and uphold trust in the financial system.

Drawing from my extensive experience in financial crime prevention, regulatory compliance, and operational leadership, I have led the design and execution of large-scale financial crime prevention initiatives that not only align with regulatory standards but also drive business optimisation and consumer trust. Having operated at the forefront of financial crime mitigation, I bring a practitioner’s perspective – ensuring that policies and controls are not just conceptual but are operationalised effectively within organisations to achieve tangible risk reduction and improved security outcomes.

How SADE Can Help

At SADE, we specialise in risk management, financial crime prevention, and regulatory compliance. Contact us at [email protected] or visit our website to explore our solutions.