Australian Federal Police have arrested seven people in Melbourne and seized $50 million worth of luxury cars and property during raids on an alleged money-laundering syndicate it says was operating “in plain sight”.
Key points:
- AFP officers started investigating Changjiang Currency Exchange when they noticed it expanding during COVID lockdowns
- Police allege a gang was laundering money through 12 retail outlets around Australia
- The gang allegedly coached criminals on how to create fake documents to conceal where their money came from, police allege
More than 300 officers executed search warrants on homes and offices in Melbourne, Sydney, Brisbane, Adelaide and Perth early Wednesday following the 14-month investigation into Changjiang Currency Exchange, a retail money-transfer business that police claim has helped criminals launder almost $230 million over the past three years.
The seven people arrested include four men and three women, aged between 33 and 40. Four are Chinese nationals and three are Australian citizens.
One member of the alleged syndicate, a 37-year-old from Balwyn in Melbourne’s east, has been charged with two counts of conspiracy to deal with the proceeds of crime. If convicted, he faces a maximum sentence of life in prison.
Police say they plan to charge the remaining six people arrested, and all seven are expected to appear in court on Thursday.
Officers also seized multiple luxury cars including a $420,000 Mercedes-Mayback GLS and a Balywn North mansion valued at $10 million.
The AFP released photographs of Rolex watches and designer handbags seized during the operation.
Police allege the seven people formed a criminal gang it has dubbed the Long River money-laundering syndicate, which operates 12 Changjiang Currency Exchange retail outlets in most Australian capital cities.
“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,” AFP Assistant Commissioner Stephen Dametto said in a statement.
“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.”
Syndicate coached criminals on making fake documents, police allege
Police say the majority of Changjiang’s customers use its services legitimately for foreign currency exchange and to send money overseas.
But they allege Changjiang also works with criminals to conceal the proceeds of crime, including from online scams and trafficking of illicit goods, and moved money in and out of Australia.
The AFP claims the gang has coached criminals on how to create fake paperwork to conceal the origins of their money, including false invoices and bank statements.
They have also charged criminals higher fees than ordinary customers, the AFP claims.
In addition to the seven alleged syndicate members arrested on Wednesday, the AFP has also charged a 37-year-old Chinese national in Sydney who it claims used Changjiang to launder $100 million allegedly stolen from the victims of an international investment scam.
He has been charged with two counts of recklessly engaging with the proceeds of crime and will appear in court on Thursday.
Police also claim the Long River syndicate failed to pay taxes on its profits from legitimate and criminal operations.
“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 homes valued at more than $10 million,” Assistant Commissioner Dametto said.
The AFP says members of the gang also purchased fake passports worth $200,000 in preparation to flee the country if their activities were detected.
The raids come after the AFP charged nine members of a separate alleged money-laundering syndicate in Sydney in February.
In that case, police allege the syndicate operated as a kind of “unregulated international bank” that was able to draw on cash reserves in multiple countries to move money on behalf of criminal clients.
The Changjiang syndicate, by contrast, allegedly operated within the regulated world of international money transfers — known as the remittance industry.
“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,” Assistant Commissioner Dametto said.
‘Gut feeling’ triggered police inquiries
Changjiang operates five retail outlets in New South Wales, three in Victoria, two in Queensland and one each in South Australia and Western Australia.
The AFP estimates Changjiang has transferred more than $10 billion in and out of Australia in the past three years, mostly on behalf of its legitimate customers.
“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,” the AFP said.
The investigation was in part triggered by AFP officers noticing a suspiciously high amount of activity at Changjiang’s retail outlets during the height of the COVID-19 lockdowns.
“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,” Assistant Commissioner Dametto said.
“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 to expand.”
The company is also facing penalties from Australia’s anti-money laundering agency Austrac, which worked with the AFP on the investigation.
“Remittance businesses provide a critical service to the community, and the vast majority operate legitimately,” AUSTRAC’s acting deputy CEO Brad Brown said in a statement.
“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.”