A woman remains behind bars and a man has been released on bail after both were charged for allegedly downloading and transmitting child abuse material.
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The woman, 22-year-old Rhiannan Hugo, of East Maitland, and the man, Tyson Murray, of Charlestown, also 22, were arrested last week as part of an Australian Federal Police operation.
The AFP began an investigation after a tip-off from the United States Homeland Security Investigations, which believed an internet user based in Australia was transmitting the material over Kik - an instant messaging app.
The AFP Eastern Command Child Protection Operations team identified Mr Murray as the alleged user of the account and executed a search warrant at his Charlestown home last Friday. Further investigations led to a second property being searched in East Maitland that night, where Ms Hugo was arrested.
Ms Hugo appeared in Maitland Local Court on Wednesday, charged with three counts of using a carriage service to transmit/publish child abuse; one count of possess/control child abuse material using a carriage service; one count of using a carriage service to access child abuse material; and one count of using a carriage service to solicit child abuse material.
She made no application for bail, which was formally refused, and is due to reappear in Maitland Local Court on January 28.
Mr Murray was charged with once count of possess/control child abuse material using a carriage service and one count of using a carriage service to access child abuse material. He appeared in Belmont Local Court on Monday and was released on conditional bail to reappear on January 13.
Under the conditions of his bail, Mr Murray must live at an address in Mayfield and not leave the premises unless he is in the company of a member of the staff of City Sleep Safe.
He must not enter Charlestown and not go near, or contact or try to go near or contact any person under the age of 16 years, or any prosecution witness.
"These arrests show how vital it is for the AFP to work with our international law enforcement partners and how diligent investigative work delivers results," AFP detective acting Inspector Matthew Ciantar said.
Homeland Security Investigations Attaché to Australia, Adam Parks, said online child exploitation was a global problem that required a global response.
"When our investigations in the U.S. uncover information pertaining to Australia, we are quick to alert AFP who pursue these offenders with a tenacity that should comfort all Australians while putting fear into the hearts of those who seek to exploit the vulnerable," Mr Parks said.