ATM Suppliers Compete for Business Tied to Illegal Tobacco Operations

In a revealing case highlighting the intersection of organized crime and financial services, Australian ATM suppliers atm2go and Next Payments are embroiled in a legal dispute over their competition to provide automated teller machines (ATMs) to tobacco shops associated with a prominent illegal tobacco figure, Hasheem Jamal Al Deleymi. Al Deleymi, an Iraqi-born businessman, was previously arrested with $530,000 in cash linked to alleged proceeds from his illicit tobacco operations. This situation has raised concerns about the role of private ATMs in facilitating money laundering and tax evasion through the illegal tobacco trade.

The conflict began when atm2go entered into an agreement to supply six ATMs to various tobacco outlets controlled by Al Deleymi between February 2021 and March 2022. However, by June 2022, these machines were reportedly replaced by Next Payments’ ATMs, prompting atm2go to seek legal recourse for breach of contract. Court documents obtained by ABC News detail how ATMs in tobacco shops can achieve transaction volumes significantly higher than average, with some machines reportedly handling three times the business of standard ATMs. According to the Reserve Bank of Australia, typical ATMs average around 38 cash withdrawals daily, while the tobacco shop ATMs in question were noted to be processing as many as 165 transactions per day.

Atm2go claims to have suffered substantial financial losses due to the replacement of its ATMs, estimating the damages at approximately $74,000, and highlighting the lucrative nature of the business tied to these illegal operations. The ATM providers earn transaction fees, with atm2go charging customers $2.50 for each withdrawal and sharing a portion of that fee with the shop owners, thus incentivizing both parties to engage in cash-only transactions for illicit tobacco sales.

The situation escalated when Al Deleymi was detained by police while in possession of a significant amount of cash, leading to a broader investigation by the New South Wales Crime Commission. Al Deleymi has faced multiple legal challenges, including charges related to money laundering and illegal tobacco possession, and he is currently awaiting sentencing for these offenses.

Industry executives, including Tim Wildash, CEO of Next Payments, have publicly denied any wrongdoing, asserting that his company is cooperating with ongoing investigations. However, he acknowledged the broader implications of the ATM industry’s links to illegal activities, stating, 'This issue is bigger than any of us could have imagined.'

Experts in criminology and economics have expressed concern over the role that private ATMs play in facilitating criminal enterprises. Dr. Lisa Thompson, a criminologist at the University of Sydney, remarked, 'The easy access to cash from these machines creates a perfect storm for money laundering operations.' Furthermore, Dr. Mark Reynolds, an economist at Monash University, noted that the high transaction rates at these ATMs reflect a systemic issue in regulatory oversight for cash-based businesses.

The Australian government has been under pressure to address the growing concerns related to illegal tobacco trade and the financial networks that support it. In recent years, significant reforms have been proposed to tighten regulations on the placement and operation of ATMs, particularly in areas linked to organized crime. As the case unfolds, it serves as a critical example of how financial services can inadvertently support illegal activities and the pressing need for regulatory frameworks that can effectively mitigate these risks.

Looking ahead, the implications of this case extend beyond the immediate parties involved. The Australian financial sector must grapple with the broader challenges posed by illicit financial activities, prompting potential reforms that could reshape how ATMs are regulated and monitored within the context of cash transactions in high-risk environments. As law enforcement agencies continue their investigations, the focus will remain on dismantling the networks that allow such operations to thrive and ensuring accountability within the ATM industry.