Drug Dealer Used Private ATMs for Money Laundering in Illegal Tobacco Shops

At the height of his epic Top End drug dealing enterprise, Peter 'Hippy' Wellman James was juggling a virtual flood of cash. The muscular, tattooed former gardener was smuggling in truckloads of prime cannabis heads packed in drums and disguised as gravestones — estimated to bring in close to a million dollars a week. Evidence of his vast cash flow was confirmed by regular payments of up to $800,000 in notes that James had put in Cryovac bags to be shipped on a near weekly basis to his Adelaide based supplier known only as the 'Russian' or 'Milkman'.

Police estimated the value of drugs he'd smuggled into the Northern Territory had topped $17 million. When he was finally arrested in 2020 with over $100,000 in cash hidden in his home, police estimated the value of drugs he'd smuggled into the Northern Territory had topped $17 million. Dealing with the huge amounts of cash should have posed a headache for the Darwin resident and potentially put him on the radar of authorities.

But the then 41-year-old — who has since been jailed for 12 years for supplying a commercial quantity of cannabis — had a legitimate excuse to move around with bags of bank notes all thanks to a legal business he ran: a fleet of private Automatic Teller Machines (ATMs). Despite having a drug conviction from 2012, James had been able to own and operate a business called atm2go Darwin using private ATMs associated with a Queensland-based business called atm2go.

The machines provided not just a cover for cash possession, but offered an opportunity for money laundering, with evidence given in court that cash from the drug dealing was to be loaded into the ATMs. The 2022 Northern Territory case was uncovered by an ABC investigation into how a lack of regulations around private ATMs is enabling their widespread use by criminals, especially those in the billion-dollar violent illegal tobacco trade.

Customers unwittingly withdrawing dirty cash. As evidenced in the James case, the ATMs also created a risk of money laundering, where a convicted criminal was legally allowed to load the machines with his own cash. Customers can unwittingly withdraw that dirty cash from the ATM. When the cash is withdrawn, the ATM sends an electronic instruction that eventually results in the customer's bank account crediting the same amount to the bank account associated with the operator of the ATM.

'The cash that started out as proceeds of crime, now appears as legitimate funds in the ATM owner's bank account,' said financial crimes consultant Neil Browne. 'No questions about the source of the funds have been asked.'

Among the private businesses supplying machines to tobacco shops is atm2go, which was associated with the ATMs used by James in the Northern Territory. Atm2go started in 2011 and offers machines for events and retail stores. Its operations have included a franchise model. Its website has promoted the business as selling, renting or placing ATMs in stores for free, taking a cut of the transactions.

The business declined to respond to questions from the ABC about how atm2go machines were supplied and used by James despite his previous criminal conviction. The ABC has confirmed atm2go machines have been installed at numerous stores across the east coast of Queensland selling illegal tobacco.

In some circumstances the machines continue to operate in the shops after they have faced regulatory action for supplying illegal tobacco. One example was just south of Brisbane, where the Marsden Gifts and Tobacco shop on Barklya Street had been promoting an atm2go machine on site before facing an interim closure order from authorities.

In June, the ABC found the shop had re-opened and was selling illegal tobacco while featuring two atm2go machines on site. Among illegal tobacco products being sold at the business for 'cash only' were $10 Hongtashan 20 packs of cigarettes, lacking required health warnings.

In inner Brisbane's West End suburb, a few hundred metres from the local police station, the 'A1 Convenience' shop sells illegal tobacco products for cash at discounted prices. The shop was temporarily closed by Queensland's Health Department for illicit tobacco supply earlier this year. At the time an atm2go machine was in use on the site.

Atm2go is still featuring an image of the machine in the West End shop on its official website promoting its 'Retail ATM' installations. The business did not comment about why its machines were still in shops once shut down by authorities for tobacco infringements and whether they were concerned about the potential use of the ATMs for money laundering.

Atm2go has made little secret of its dealings with tobacco shops — even promoting on its social media pages the successful installation of ATMs in the businesses. Business searches link the Strathpine shop to Bilal Jamal Al Dilami, who in 2023 reportedly faced charges relating to the seizure of 5,000 nicotine filled illegal vapes.

Contacted about the atm2go case, Home Affairs Minister Tony Burke said his government would be taking action in relation to private ATMs. 'This has been a growing concern for the government and our agencies,' he said. 'I've asked the agencies to work further on this specific issue.'

AUSTRAC, the nation's money laundering watchdog, said it was aware of the case where Northern Territory drug dealer James was operating the ATMs. 'By using the proceeds of crime to replenish private ATMs, money launderers can layer or attempt to disguise the illicit source of the cash,' the spokesperson said.

The ABC has previously revealed how Next Payments, a Victorian-based company backed by prestigious investment house Macquarie Group, had supplied ATMs to illegal tobacco sellers. Next Payments has told the ABC it was cooperating with authorities in relation to a 'live investigation' relating to illegal tobacco.

The company's CEO Tim Wildash has rejected allegations the machines posed a money laundering risk, arguing anomalies would be noticed quickly in the bank accounts being used. The ABC also asked atm2go if it was concerned about how their machines might be helping to fuel what is an illegal and violent business. It declined to comment.

Last month, two men received burns and were hospitalised when the tobacco shop they were minding was allegedly set on fire at Browns Plains south of Brisbane. As police picked through the smoking wreckage of the shop in the aftermath, a slightly scorched but still legible sign associated with the business was very visible on the pavement in front. The sign featured an arrow pointing towards the shop and the words atm2go.