Alleged Chinese Gangsters Accused of Laundering $228 Million through Business Linked to Former Minister

alleged chinese gangsters accused of laundering 228 million through business linked to former minister
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A transnational crime syndicate has been accused of laundering $228 million in illicit funds and cryptocurrency through a business that was promoted by a former minister of the Howard government. The business, known as the “Long River,” is allegedly controlled by Chinese gangsters. On Wednesday, Australian Federal Police officers, part of Operation Avarus-Nightwolf, arrested seven suspected members of this crime syndicate in Melbourne on charges related to serious financial crimes.

The police suspect that the syndicate used the Changjiang remittance empire to launder the funds, a service that was also used by members of the Chinese-Australian community for legitimate fund transfers. Operation Avarus-Nightwolf is notable not only for the substantial amount of funds allegedly laundered but also for the premise that a Chinese criminal organization managed to establish an Australian government-licensed international money transfer service with the involvement of former Howard government immigration minister, Gary Hardgrave, who promoted the business in 2022.

Federal police Eastern Command Assistant Commissioner Stephen Dametto emphasized that the alleged syndicate operated openly, with multiple shopfronts across the country. Some syndicate members reportedly obtained false passports to facilitate escape if they suspected law enforcement attention.

The 14-month operation conducted by the AFP reveals allegations that the Long River crime syndicate moved $228 million in illicit funds between 2020 and 2023. The police have also taken measures to restrain over $50 million in luxury assets belonging to some of the arrested suspects, including a $10 million property in Melbourne’s eastern suburbs. It should be noted that there is no suggestion of Gary Hardgrave’s involvement in any wrongdoing or as a police suspect, nor any indication that he suspected Changjiang’s involvement in money laundering.

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According to police allegations, the Long River syndicate provided instructions to its organized crime clients on how to disguise the movement of potentially illicit funds through false invoices and other cover stories while transferring funds between China, Australia, and other destinations via Changjiang remitters.

Furthermore, intelligence briefings from 2017 to 2021 reveal that Changjiang-linked remittance businesses gained licenses from AUSTRAC, Australia’s anti-money laundering agency, allowing them to move substantial sums of money as early as 2013.

These arrests, alongside a previous AFP operation known as Midas, which has so far restrained assets worth at least $200 million in New South Wales, highlight the magnitude of Australia’s money laundering problem. It emphasizes the challenge law enforcement faces as they tackle the flow of illicit funds from China, often in violation of Beijing’s strict capital flight laws, or generated through suspected fraud, corruption, or drug trafficking.

The recent arrests also raise questions about the role of the Chinese Communist Party in facilitating or overlooking the movement of illicit money from China to Western countries. A senior law enforcement official from New South Wales expressed concerns regarding the reluctance to openly discuss the true scale of the issue and the Chinese government’s apparent inaction in addressing it. They also emphasized the need for more resources and legislative changes to combat this problem effectively.

Federal police and AUSTRAC intelligence reports describe a network of Changjiang-linked money remitters that have been moving hundreds of millions of dollars annually, including a significant amount of money during 2020. In late 2020, the Australian Criminal Intelligence Commission warned about Changjiang’s increasing involvement in suspected money laundering activities.

Changjiang had previously been linked to the Chen MLO (money laundering organization), which posed a grave risk to national security and was accused of moving funds for fugitive drug lord Hakan Ayik and the Khanani Middle Eastern crime syndicate.

The Australian remittance industry has grown substantially, especially with the influx of money from China. It has also seen the sophistication of money launderers who exploit technology to evade detection and mix illicit funds with legitimate transactions.

In response to these challenges, the Australian government faces pressure to introduce long-stalled “Tranche 2” laws, which would impose anti-money laundering obligations on accountants, real estate agents, and lawyers similar to those required of banks and casinos for reporting suspected money laundering activities.

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