SEVEN members of an alleged Chinese organised crime syndicate have been charged as part of Australia’s “most complex” AML investigation.
The suspects are accused of secretly running a prominent, multi-billion-dollar money remitting chain in Australia.
The Australian Federal Police (AFP) said the Changjiang Currency Exchange was being secretly run by the Long River money laundering syndicate. It is accused of laundering almost $229 million in the proceeds of crime in the past three years.
More than 240 AFP members, plus 92 specialist members, yesterday executed 20 search warrants across every mainland state while simultaneously restraining more than $50 million in property and vehicles under AFP-led Operation Avarus-Nightwolf.
Four Chinese nationals and three Australian citizens have been charged for their alleged involvement in the money laundering syndicate and are expected to appear in Melbourne Magistrates’ Court on Thursday last. (October 26).
The Changjiang Currency Exchange, which has 12 shop fronts in every mainland state, is now subject to regulatory action by AUSTRAC.
The Changjiang Currency Exchange has modern-looking shop fronts and supplied resources to customers about Australia’s anti-money laundering laws, which the AFP will allege was the company’s attempt to look and act like a law-abiding remittance company.
The AFP will allege it identified links between known money laundering organisations and the Changjiang Currency Exchange, which piqued the attention of investigators when the company opened new and updated existing shopfronts in Sydney during COVID-19 lockdowns.
In August 2022, Taskforce Avarus, an AFP-led standing taskforce on money laundering, established Operation Avarus-Nightwolf to investigate the Long River money laundering organisation, an AFP high-value target. The AFP will allege it linked this criminal group to the Changjiang Currency Exchange.
Operation Avarus-Nightwolf, a 14-month investigation, is supported by AUSTRAC, Australian Border Force (ABF), Australian Criminal Intelligence Commission (ACIC), the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and the United States Department of Homeland Security Investigations (HSI).
A purpose-built private industry working group was also established through the Fintel Alliance to ensure the alleged syndicate could be dismantled and any potential financial mechanisms it was exploiting could be closed.
The Changjiang Currency Exchange has transferred in excess of $10 billion in the past three financial years. While most of these funds were from customers engaged in lawful actions, the AFP will allege the company facilitated a system for organised criminals to secretly transfer unlawfully-obtained money in and out of Australia. The AFP alleges the amount of money laundered between 2020-2023 was $228,883,561.
It is alleged some of the money laundered by the syndicate was from the proceeds of crime, including from cyber-enabled scams, the trafficking of illicit goods and violent crimes.
It is alleged the syndicate would coach its criminal customers how to create fake business paperwork, like false invoices and bank statements.
It is alleged this enabled criminal customers and the Changjiang Currency Exchange to show authorities that unlawfully-gained money was from lawful sources in the event the transfers came to the attention of authorities.
Put simply this how the AFP alleges money was laundered – that the Changjiang Currency Exchange transferred unlawfully-obtained funds to national and international accounts by claiming it was the legitimate business profits and business expenses of their customers.
The AFP will allege the construct of Changjiang Currency Exchange’s criminal enterprise, and accomplices allegedly recruited within the financial sector, also enabled syndicate members to financially benefit from the proceeds of crime and tax evasion between 2020-2023.
It is alleged the Changjiang Currency Exchange profited from every transaction it made and charged higher fees for customers with unlawful funds than customers with lawful funds.
The AFP will allege the Changjiang Currency Exchange avoided its tax liabilities on legitimate money remitted and other income, depriving Commonwealth taxpayers of millions of dollars.
It is alleged the co-mingling of legal and illicit funds enabled the company to transfer up to $100 million a day for customers in Australia and throughout the world, with the volume of transfers masking the alleged laundering of tainted funds.
Further, it is alleged the Changjiang Currency Exchange sought to avoid undue regulatory attention by actively making efforts to appear legitimate in its reporting.
AFP Eastern Command Assistant Commissioner Stephen Dametto said it would be alleged the highly-organised syndicate purchased false passports for $200,000 each, which could have enabled members to flee the country in the event law enforcement agencies became suspicious about their activities.
“The AFP will allege the Changjiang Currency Exchange was able to hide its illegal behaviour because it looked like a legitimate and lawful money remitter,’’ Assistant Commissioner Dametto said.
“The reason why this investigation was so unique and complex was that this alleged syndicate was operating in plain sight with shiny shopfronts across the country – it was not operating in the shadows like other money laundering organisations.”
AFP Assistant Commissioner Dametto said one aspect of the investigation was linked to COVID-19 lockdowns in Sydney.
“During COVID-19, AFP members were still coming into work, and while most of Sydney was a ghost town, alarm bells went off among our money laundering investigators when they noticed Changjiang Currency Exchange opened and updated new and existing shopfronts in the heart of Sydney.
“It was just a gut feeling – it didn’t feel right. Many international students and tourists had returned home, and there was no apparent business case for Changjiang Currency Exchange to expand.”
The AFP will allege syndicate members were able to amass a significant amount of illegal wealth from their criminal activity.
“We allege they lived the high life by eating at Australia’s most extravagant restaurants, drinking wine and sake valued in the tens of thousands of dollars, travelling on private jets, driving vehicles purchased for $400,000 and living in expensive homes, with one valued at more than $10 million,” Assistant Commissioner Dametto said.
Property and other assets suspected of being purchased with tainted money have now been restrained by the Criminal Assets Confiscation Taskforce (CACT). The assets include houses and investment properties, luxury vehicles, and other high value luxury property items.
Assistant Commissioner Dametto said Operation Avarus-Nightwolf was undertaken by some of the best money laundering investigators, forensic accountants and asset confiscation teams within law enforcement.
“Starting with a handful of members, the investigation team rapidly expanded to include 42 AFP members who worked to build the criminal case, while the CACT traced assets that were allegedly purchased by the syndicate using the proceeds of their criminal conduct.
“AFP investigators and key partners spent 14 months using the AFP’s unique expertise, capabilities and legislation – including five forensic accountants and undercover operatives – to plan and execute the takedown of the Long River money laundering organisation.
“Investigators combed through bank statements, tax records, identity documents and many other financial records while deploying specialist AFP capabilities to capture evidence.”
He said it would be alleged the Long River money laundering organisation had been building its enterprise over many years.
“It is a highly-complex, sophisticated money laundering organisation,’’ he said.
“Unlike traditional money laundering organisations that exploit vulnerabilities in the financial sector, the Long River money laundering organisation entrenched itself into the very fabric of the financial services industry, becoming one of the largest independently-owned remitters in the country. We allege that enabled it to exploit vulnerabilities far more easily, and for a period of time.
“We expect our charges will significantly impact on the amount of illicit money being remitted in and out of Australia in the coming days alone.”
He said dismantling the Long River money laundering syndicate required a whole-of-government effort.
He said the AFP and its partners today were sending a strong warning to money laundering syndicates that they would be identified, dismantled, charged and stripped of unlawfully-gained assets.
Over the past 12 months alone, Taskforce Avarus investigations have led to 26 people being arrested or charged for money laundering offences plus removed more than $270 million from the criminal environment.
AUSTRAC’s Acting Deputy CEO, Brad Brown, said AUSTRAC’s financial intelligence expertise was critical in supporting the AFP to investigate and disrupt the massive, alleged transnational money laundering operation.
“As Australia’s financial intelligence agency, AUSTRAC’s unique capability to follow the money as it moves through the financial system, crosses international and digital environments – transforming from cash to cryptocurrency – flushes out suspicious transactions linked to crime,” he said.
“AUSTRAC’s financial intelligence analysts have specialist skills enabling us to surface complex money laundering methodologies and identify property, high value assets, and key players in this operation.
“In our role as a regulator, we actively monitor high-risk entities across the banking, gambling, remittance, and virtual assets sectors. We conduct supervision campaigns and assessments and take decisive action where we detect serious and systemic non-compliance or criminal activity.
“Remittance businesses provide a critical service to the community, and the vast majority operate legitimately. However, the nature of the business means remitters are at a higher risk of exposure to money laundering, terrorism financing and other serious crimes. The onus is squarely on remittance businesses to understand and comply with their anti-money laundering and counter-terrorism financing obligations.
“The successful result today leveraged our long-standing engagement with financial industry partners, which injected vital real-time support to the investigation. Today’s outcome reflects the combined impact of AUSTRAC’s financial intelligence expertise, regulatory powers, and the effectiveness of our multi-lateral engagement with industry partners and law enforcement.”
Acting ABF Assistant Commissioner Clinton Sims acknowledged the inter-agency collaboration resulting in this massive outcome and said foreign criminals have no place within our community.
“The integrity of Australia’s visa and migration programs is critical to our economic prosperity. This operation highlights the emphasis the ABF and our partner agencies put in to ensuring criminals can’t exploit our visa system, “Acting Assistant Commissioner Sims said.
“Foreign nationals who partake in serious criminal activity will have their visa status assessed, be considered for cancellation and be liable for removal from Australia”.
“The ABFs capabilities stretch far beyond stopping drugs at our shores, and we are proud to have provided critical resourcing in order to bring down this criminal syndicate and stop their illegal activities in one of the biggest ever money laundering operations.”
ASIC Deputy Chair Sarah Court said ASIC was pleased to have been able to contribute towards a fair, strong and efficient financial system for all Australians by working with partner agencies and providing high-quality intelligence support to this operation.
“The AFP-led investigation demonstrates the value of multi-agency intelligence sharing and operational activity in tackling complex serious financial crime and its impact on Australia’s financial sector.”
ATO Deputy Commissioner John Ford said money laundering was a serious offence, enabling criminals an entryway to other offences, including tax fraud.
“These outcomes should send a clear message to those who think that they can hide illicitly sourced money, that they will be caught.”
ACIC Executive Director Intelligence Operations Jennifer Hurst said the operation was an excellent result by Australian law enforcement working to combat the threat of money laundering, which was a key enabler for transnational serious organised crime.
“Taskforce Avarus exemplifies what can be achieved through multi-agency collaboration and cooperation. By tirelessly targeting key players, we will continue to dismantle these alleged criminal networks and focus on keeping Australian communities safe.”
HSI Regional Attaché Ernest Verina said: “The outcome of this investigation exemplifies the exceptional coordination and collaboration between Australian and US law enforcement agencies.
“We remain committed to our partnership in disrupting the flow of illicit proceeds and safeguarding the integrity of our financial systems.”
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
