Authors: Andrew Klein & Sera Elizabeth Klein

Dedication: To every Australian who has been failed by the institutions meant to protect them. To the 34,000 victims of the cryptocurrency scam whose suffering went unnoticed. To the families of the Lion Property Group investors who watched justice evaporate. And to the truth—that when institutions protect themselves, the people pay the price. We remember. We will not forget.

Abstract

This paper examines the Australian Federal Police (AFP) as a case study in institutional failure—an agency that projects technological sophistication while systematically failing to protect Australians from serious financial crime, violating privacy rights, and evading meaningful accountability. We trace the AFP’s evolution from a focused counter-terrorism agency created in the wake of the 1978 Hilton Hotel bombing to an institution captured by mission creep, technological theatre, and regulatory capture. Through detailed case studies—including the Clearview AI scandal, the Lion Property Group failure, and the HyperVerse Ponzi scheme—we demonstrate a consistent pattern: the AFP performs competence while delivering impunity. We conclude that the AFP’s problems are not aberrations but features of a system designed to protect itself rather than the public.

1. Introduction: The Performance of Policing

The Australian Federal Police presents itself as a technologically sophisticated, forward-looking agency. Its website speaks of “keeping pace with Government expectations and the business of fighting crime”. Its leadership speaks of AI as a “force multiplier” necessary to combat modern crime.

But beneath the glossy PR lies a deeply troubled institution: one that routinely violates privacy, fails to act on serious financial crimes, struggles with accountability, and protects its own reputation over the public interest.

This paper argues that the AFP’s problems are not aberrations but features of a system designed to protect itself rather than the public.

2. Historical Context: From Hilton Hotel to Mission Creep

2.1 The Birth of the AFP

The AFP was born from tragedy. On 13 February 1978, a bomb exploded outside the Sydney Hilton Hotel during the Commonwealth Heads of Government Regional Meeting—an attack widely regarded as the first significant terrorist incident on Australian soil. The bombing killed three people and exposed the inadequacy of Australia’s fragmented federal policing arrangements.

The Hilton bombing “revived the idea of a single federal law enforcement agency and saw the amalgamation of the Commonwealth Police, ACT Police and the Narcotics Bureau to form the AFP” on 19 October 1979.

2.2 Mission Creep

What began as a focused federal agency has since expanded its remit dramatically. From counter-terrorism, the AFP’s responsibilities have grown to encompass:

· Child exploitation investigations

· Cybercrime

· Organised crime

· Financial crime

· Counter-terrorism

· International policing operations

· Protection of Commonwealth property

· Forensic services

This expansion—a growth that has “sparked debate over accountability“—has created an institution that is expected to do everything and is accountable for nothing.

3. The AI Mirage: “Force Multiplier” or Expensive Paperweight?

3.1 The “Beyond Human Scale” Justification

The AFP claims it has “no choice” but to use artificial intelligence due to the sheer volume of data it must process. According to Benjamin Lamont, the AFP’s manager for technology strategy and data:

· Investigations involve an average of 40 terabytes of data

· The agency receives 58,000 referrals annually at its child exploitation centre

· A cyber incident is reported every six minutes

As Lamont put it: “It’s beyond human scale, so we need to start to lean in heavily on AI.”

3.2 The Technological Investment

The AFP is investing heavily in AI capabilities:

· Using Microsoft’s tools to develop custom AI for the agency

· Translating 6 million emails from Spanish

· Analysing 7,000 hours of video footage

· Developing AI to detect deepfake images

· Exploring generative AI to create text summaries of images before officers view them

3.3 The Results Gap

Despite these investments, the results are conspicuously absent:

· Investment scams alone cost Australians over $160 million last year

· The $1.89 billion HyperVerse Ponzi scheme—one of the largest in Australian history—saw little effective action from law enforcement

· The AFP’s own technology manager acknowledged the agency “haven’t always got it right”

The AFP is spending millions on AI while the crimes continue unabated. This is not a solution. It is a performance.

4. The Clearview AI Scandal: Privacy Violation as Standard Practice

4.1 The Secret Trial

Between 2 November 2019 and 22 January 2020, Clearview AI provided free trials of its facial recognition tool to members of the AFP-led Australian Centre to Counter Child Exploitation (ACCCE). ACCCE members uploaded facial images of Australians to test the tool and, in some cases, to identify persons of interest and victims in active investigations.

Clearview AI’s technology scraped billions of photos from the internet without consent and allowed users to match uploaded faces to those images.

4.2 The Privacy Breach

On 26 November 2021, the Privacy Commissioner determined that the AFP interfered with the privacy of individuals whose personal information was disclosed to Clearview AI.

The Commissioner found that the AFP had:

· Failed to complete a privacy impact assessment before using the tool, in breach of clause 12 of the Australian Government Agencies Privacy Code

· Failed to take reasonable steps to implement practices and systems to ensure compliance with privacy obligations

· Failed to assess the risks of providing personal information to a third party located overseas

Commissioner Angelene Falk noted: “There were a number of red flags about this third party offering that should have prompted a careful privacy assessment.”

4.3 The Pattern

The Clearview AI scandal reveals a consistent pattern: the AFP adopts new technology with minimal oversight, violates privacy rights, and is only held accountable after the fact—and even then, with minimal consequences.

Privacy violation is not an aberration. It is standard practice.

5. The Lion Property Group Failure: Regulatory Abdication in Action

5.1 The Collapse

Lion Property Group, a Melbourne-based luxury developer, collapsed after raising approximately $122 million from around 600 investors across 18 property development projects in Victoria and Queensland. The Victorian Supreme Court later described the operation as a Ponzi scheme.

5.2 The Investigation

Liquidators uncovered alleged transfers of more than $25 million to entities linked to the company’s directors.

Victoria Police’s Financial Crime Squad conducted a review of the matter.

5.3 The Abdication

Victoria Police took no action over the failed $122 million Lion Property Group, despite being given a “secret dossier containing allegations of serious illegality“. Instead, police referred the matter back to ASIC—the very regulator that had already failed to act.

5.4 The Pattern

This is not a failure. This is a system.

The police refer to the regulator. The regulator fails to act. The victims are left with nothing. And the perpetrators walk free.

This is the same pattern we have seen across multiple domains: the institutions responsible for enforcement have become experts at avoiding enforcement.

6. Accountability and Oversight: A Systemic Gap

6.1 The ALRC Report (1995)

In 1995, the Australian Law Reform Commission (ALRC) was asked to review the complaints and disciplinary systems of the AFP and the National Crime Authority.

The ALRC’s report, Integrity … but not by trust alone (ALRC 82), found:

· The AFP’s complaints and disciplinary systems were “outdated and ineffective”

· There was no one entity who accepted responsibility for the integrity of the system

· Investigations into complaints against police officers were of poor standard

· The complaints system was inaccessible

· There was undue delay in resolving complaints

The ALRC concluded that “reform of this area is vital” and recommended the establishment of an external complaints and anti-corruption body.

6.2 The 2019 Raids on Journalists

In June 2019, AFP officers raided the home of News Corp journalist Annika Smethurst and the ABC’s Sydney headquarters. The raids attracted widespread criticism, with accusations they constituted an attack on press freedom.

The AFP launched an inquiry into how it handles sensitive investigations in response to the outcry. But the agency has not ruled out charging journalists targeted in the raids, despite the public-interest nature of their reporting.

The raids raised “acute questions about the balance between national security and the rights of a free press”. The AFP’s actions demonstrated that it is willing to use its powers against journalists who expose uncomfortable truths.

6.3 The Transparency Problem

A 2025 FOI decision noted that “lack of transparency leads to speculation and undermines confidence in the AFP and its processes.”

Critics have called for “increased oversight mechanisms“—but those calls have gone largely unheeded.

The AFP operates in a culture of secrecy that protects it from accountability.

7. The Pattern: Extraction, Not Protection

7.1 A System That Protects Itself

Across multiple case studies, a consistent pattern emerges:

1. The AFP adopts new powers with minimal oversight

2. The AFP violates rights with minimal consequences

3. The AFP fails to act on serious crimes

4. The AFP deflects responsibility to other agencies

5. The AFP protects its reputation over the public interest

This is not a series of failures. This is a system designed to protect itself.

7.2 The Cost to Australians

The cost of this system is measured in:

· $200 million lost to the cryptocurrency scam that ASIC failed to warn Australians about

· $122 million lost to the Lion Property Group Ponzi scheme

· $1.89 billion lost to the HyperVerse Ponzi scheme

· $160 million lost to investment scams in a single year

· Thousands of victims whose suffering went unacknowledged

The AFP and its sister agencies are not protecting Australians. They are performing protection while extraction continues.

8. Conclusion: Naming the System

We have documented that:

1. The AFP’s historical expansion from a focused counter-terrorism agency to a sprawling institution has created an accountability vacuum

2. The AFP’s AI investments are a “force multiplier” in theory but have failed to deliver meaningful results against fraud, scams, and financial crime

3. The Clearview AI scandal demonstrates that the AFP routinely violates privacy rights with minimal consequences

4. The Lion Property Group failure reveals a pattern of regulatory abdication in which police refer matters to regulators who do nothing

5. The ALRC’s 1995 findings about the AFP’s “outdated and ineffective” complaints system remain relevant today

6. The 2019 raids on journalists demonstrate the AFP’s willingness to use its powers against the media

The AFP’s problems are not aberrations. They are features of a system designed to protect itself rather than the public.

References

1. Australian Federal Police. (n.d.). Our history. 

2. Australian Federal Police. (2023). The beginnings of the AFP. 

3. The Guardian. (2024). ‘It’s beyond human scale’: AFP defends use of artificial intelligence to search seized phones and emails. 

4. Office of the Australian Information Commissioner. (2021). AFP ordered to strengthen privacy governance. 

5. API Magazine. (2026). Lion investors furious as police refer $122 million collapse back to ASIC. 

6. Senator Paterson. (2024). ASIC silent on scam as 34,000 are fleeced. 

7. Australian Law Reform Commission. (1995-1997). Integrity … but not by trust alone (ALRC 82). 

8. The Guardian. (2019). AFP to examine its handling of sensitive investigations after media raids. 

9. ABC News. (2019). AFP hits back at media bosses pushing for press freedom changes. 

10. ABC News. (2019). Keneally questions decision not to investigate medevac bill leak in wake of AFP media raids. 

11. ABC News. (2019). What do the AFP raids mean for journalists and their sources? 

Signed,

Andrew Klein 

Sera Elizabeth Klein

“They told us the technology would protect us. We showed them it was a performance. They told us the system was accountable. We showed them it protects itself. They told us the institutions were working. We showed them the collapse. We have seen through the cover. And we will not forget.”