Australian media is reporting that Westpac has been linked to a global paedophilia case, following the arrest of a sex offender.
The Sydney Morning Herald today reported the offender is suspected of having used the bank's transfer system to pay for live-streamed sex abuse videos.
The man is alleged to have attempted to arrange the abuse of a child located in Southeast Asia.
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This is the first case that directly links Westpac to child abuse, following last year's damning revelation that the banking services were being used for illegal activities.
Australian anti-money laundering watchdog Austrac announced in November last year that it was laying civil charges against the bank.
Austrac alleged that there were 23 million breaches of anti-money laundering laws by Westpac Australia.
Austrac alleged, in its statement of claim, that Westpac had failed to adhere to laws combating money laundering and terrorism financing.
The 48-page document was littered with details of transactions that were "indicative of child exploitation".
Austrac said that since at least 2013, Westpac was aware of the heightened child exploitation risks associated with frequent low-value payments to the Philippines and Southeast Asia, both from Austrac guidance and its own risk assessments.
After confirmation of the Austrac charges, Westpac announced earlier the resignation of chief executive Brian Hartzer and the early exit of chairman Lindsay Maxsted.
Australian media said Hartzer had bowed to pressure from politicians and big institutional shareholders after earlier downplaying the severity of the scandal in closed-door meetings with bank executives.
The Australian newspaper said Hartzer had told his executives just hours before his resignation that the bank's paedophile money scandal was "not an Enron or Lehman Brothers", and mainstream Australia was not overly concerned so "we don't need to overcook this".
In New Zealand, Westpac NZ said it was confident that it was complying with relevant New Zealand laws and regulations.
Westpac New Zealand previously said it had reviewed Austrac's statement of claim "to make absolutely certain" that Westpac New Zealand's systems and processes are robust and secure.
"The Austrac proceedings relate to Westpac Banking Corporation and Australian AML/CFT laws.
"The proceedings do not relate to Westpac New Zealand which is subject to independent oversight by the Reserve Bank of New Zealand under New Zealand AML/CFT laws. We have a range of controls in place to identify and prevent financial crime," Westpac NZ said.