Major Money Laundering Syndicate Busted in Australia: Seven Charged in Complex Investigation

In a significant development, seven individuals associated with an alleged Chinese organized crime syndicate have been charged as part of what Australian authorities are calling the country's "most complex" investigation into anti-money laundering (AML). The suspects are accused of covertly operating a prominent multi-billion-dollar money remitting chain known as the Changjiang Currency Exchange in Australia. The Australian Federal Police (AFP) has revealed that the currency exchange was clandestinely controlled by the Long River money laundering syndicate, responsible for laundering nearly $229 million in the proceeds of crime over the past three years.

This operation was executed by over 240 AFP members and 92 specialist agents who simultaneously conducted 20 search warrants across all mainland states. They also seized more than $50 million worth of property and vehicles under the umbrella of Operation Avarus-Nightwolf.

The accused individuals include four Chinese nationals and three Australian citizens who are expected to appear in Melbourne Magistrates' Court. The Changjiang Currency Exchange, with 12 shopfronts across the country, is now facing regulatory action by AUSTRAC.

The Changjiang Currency Exchange presented itself with modern-looking shopfronts and provided customers with information on Australia's anti-money laundering laws, making it appear as a legitimate remittance company. The AFP alleges that it identified connections between known money laundering organizations and the exchange when it expanded by opening new shopfronts in Sydney during COVID-19 lockdowns.

Taskforce Avarus, an AFP-led standing taskforce on money laundering, initiated Operation Avarus-Nightwolf in August 2022 to investigate the Long River money laundering organization, which was a high-value target. The AFP alleges that this criminal group was linked to the Changjiang Currency Exchange.

Operation Avarus-Nightwolf, a 14-month investigation, received support from various agencies, including 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).

To ensure the dismantling of the alleged syndicate and closure of any potential financial mechanisms it exploited, a private industry working group was established through the Fintel Alliance.

The Changjiang Currency Exchange facilitated the transfer of over $10 billion in the past three financial years, with the AFP alleging that the company provided a system for organized criminals to secretly transfer unlawfully-obtained money in and out of Australia. The amount of money laundered between 2020 and 2023 is alleged to be $228,883,561, with some of the funds originating from cyber-enabled scams, the trafficking of illicit goods, and violent crimes.

The syndicate allegedly coached its criminal clients on creating fake business paperwork, such as false invoices and bank statements, to give the appearance that unlawfully-gained money came from legitimate sources.

The Changjiang Currency Exchange is accused of transferring unlawfully-obtained funds to national and international accounts by claiming they were the legitimate business profits and expenses of their customers.

The AFP alleges that the company and its accomplices within the financial sector allowed syndicate members to profit from the proceeds of crime and evade taxes between 2020 and 2023. The exchange charged higher fees for customers with unlawful funds, and it is alleged that it evaded tax liabilities on legitimate money remitted, depriving Commonwealth taxpayers of millions of dollars.

The mixing of legal and illicit funds allowed the company to transfer up to $100 million a day for customers worldwide, masking the alleged laundering of tainted funds. To avoid regulatory attention, the Changjiang Currency Exchange made active efforts to appear legitimate in its reporting.

The AFP claims that the syndicate purchased false passports for $200,000 each, potentially to enable members to flee the country if law enforcement agencies grew suspicious of their activities.

In an unexpected turn of events, the syndicate expanded during the COVID-19 lockdowns in Sydney, raising red flags among investigators. The AFP alleges that it was unusual for the exchange to open and update new shopfronts during a time when international students and tourists had left the country.

The syndicate members are believed to have accumulated significant wealth from their criminal activities, leading lavish lifestyles that included dining at high-end restaurants, expensive wine and sake consumption, private jet travel, luxury vehicle ownership, and living in multi-million-dollar homes.

Property and assets suspected of being purchased with tainted money have been restrained by the Criminal Assets Confiscation Taskforce (CACT). These assets include houses, investment properties, luxury vehicles, and other high-value luxury items.

AFP Assistant Commissioner Stephen Dametto emphasized that dismantling the Long River money laundering syndicate required a comprehensive effort from all government agencies involved. The investigation involved a team of 42 AFP members who spent 14 months building the criminal case and tracing assets allegedly acquired through criminal conduct.

This operation is part of Taskforce Avarus, which, over the past year, has led to the arrest or charging of 26 individuals for money laundering offenses and the removal of more than $270 million from the criminal environment.

AUSTRAC's Acting Deputy CEO, Brad Brown, highlighted the importance of financial intelligence in supporting the investigation and disrupting the massive alleged transnational money laundering operation. AUSTRAC's ability to trace money through the financial system and across various digital environments played a crucial role in uncovering suspicious transactions linked to crime.

Remittance businesses, which provide an essential service to the community, often operate legitimately, but they are at a higher risk of exposure to money laundering and other serious crimes. The responsibility lies with remittance businesses to understand and comply with their anti-money laundering and counter-terrorism financing obligations.

The successful outcome of the investigation was achieved through the combined efforts of AUSTRAC's financial intelligence expertise, regulatory powers, and collaboration with industry partners and law enforcement.

The Australian Border Force (ABF) played a significant role in the operation, emphasizing that foreign criminals have no place in the Australian community. The integrity of Australia's visa and migration programs is crucial, and those involved in serious criminal activity will have their visa status assessed and may be considered for cancellation and removal from Australia.

ASIC Deputy Chair Sarah Court expressed satisfaction with ASIC's contribution to the operation, which aimed to maintain a fair, strong, and efficient financial system for all Australians. The AFP-led investigation demonstrated the value of multi-agency intelligence sharing and operational activity in combating complex serious financial crime.

The Australian Taxation Office (ATO) also highlighted the seriousness of money laundering, as it can provide criminals with an entryway to other offenses, including tax fraud. The authorities intend to send a clear message that illicitly sourced money will be discovered and dealt with.

ACIC Executive Director Intelligence Operations Jennifer Hurst emphasized that money laundering is a key enabler for transnational serious organized crime and that multi-agency collaboration, as demonstrated by Taskforce Avarus, is crucial to dismantling such criminal networks and keeping Australian communities safe.

HSI Regional Attaché Ernest Verina praised the coordination and collaboration between Australian and US law enforcement agencies, affirming their commitment to disrupting the flow of illicit proceeds and safeguarding the integrity of financial systems.

This operation represents a significant milestone in combating money laundering and dismantling a highly-complex, sophisticated money laundering organization that had entrenched itself deeply within the financial services industry. The charges against the syndicate members are expected to have a substantial impact on the remittance of illicit money in and out of Australia.

By fLEXI tEAM