A firebomb attack on a synagogue in Melbourne in December 2024, causing over $20 million in damages, has been directly linked to Iran’s Islamic Revolutionary Guard Corps (IRGC), according to Australian Security Intelligence Organization (ASIO) Director-General Mike Burgess. The revelation, confirmed by multiple sources, has prompted a significant escalation in diplomatic tensions and a reassessment of Australia’s counter-terrorism strategies.
Burgess publicly attributed the attack on the Adass Israel Synagogue, alongside a similar incident targeting the Lewis Continental Kitchen in Sydney in October 2024, to the IRGC’s use of proxies. The Sydney attack was coordinated by Sayed Mohammad Moosawi, formerly a chief of the Nomads motorcycle gang. Although no terrorism charges have yet been filed in Australia related to these attacks, the findings have exposed a concerning nexus between state-sponsored terrorism and organized crime within the country.
The IRGC, already designated as a terrorist entity by Canada and the United States, appears to have leveraged existing criminal networks to carry out these attacks, employing a strategy of plausible deniability. This methodology mirrors tactics previously observed in alleged IRGC plots targeting locations in Sri Lanka and the United States in 2024, involving the recruitment of drug traffickers and organized criminals to execute attacks.
Australian authorities have identified a potential link between the IRGC and Kazem “Kaz” Hamad, an illicit tobacco kingpin deported from Australia to Iraq in 2023. Hamad was allegedly connected to approximately 150 arson attacks targeting tobacco shops across Melbourne. A blue Volkswagen Golf, used in these attacks, including one on the Lux nightclub in November 2024, was also allegedly involved in the synagogue bombing and a separate shooting in Bundoora on the same night, according to a joint report by the Australian Federal Police (AFP), ASIO, and Victoria Police.
The illicit tobacco market in Australia, estimated to be worth around $10 billion annually, is fueled by the nation’s high excise taxes on tobacco products. At A$40 (approximately US$26) for a pack of 20 cigarettes as of September 2025, Australian tobacco prices are significantly higher than those in countries like Canada, where a pack averages between CAD$15.36 and $19.75. This price disparity drives a lucrative black market, which authorities say has been exploited for terrorist financing. The Australia Criminal Intelligence Commission (ACIC) has identified the illicit tobacco trade as a substantial source of funding for offshore terrorist groups.
In response to the IRGC’s involvement, the Australian government expelled the Iranian ambassador and suspended its embassy in Canberra in August 2025. The government also formally listed the IRGC as a terrorist organization, a move intended to bolster information sharing with the Five Eyes intelligence alliance and provide a legal framework for prosecuting IRGC-affiliated activities within Australia.
Law enforcement efforts to dismantle the illicit tobacco market have been intensified, with new legislation enacted in Queensland and New South Wales in 2025. Operation Xray Modred, a recent operation in Queensland, resulted in the seizure of approximately $53.8 million worth of illicit tobacco across 17 storage facilities – one of the largest seizures in the state’s history.
While enforcement actions are underway, discussions are ongoing regarding potential policy changes to Australia’s tobacco excise tax. Some stakeholders, including major tobacco wholesalers, have proposed a temporary freeze on planned price increases to allow time for the government and law enforcement to develop more comprehensive solutions. Concerns remain that reducing excise could negatively impact government revenue, but proponents argue that converting illicit market users to legitimate channels could offset these losses.
The Albanese government has not publicly commented on the excise tax proposal, but continues to emphasize a whole-of-society approach to reducing tobacco use through education and promotion of healthy lifestyles, with the aim of diminishing demand for illicit products and, disrupting terrorist financing networks.
