Three men have appeared before a Melbourne court after allegedly helming one of Australia’s biggest money laundering syndicates, which is accused of purchasing the identities of hundreds of foreign students on the dark web to wash cash and move tens of millions of dollars offshore.
Police allege the ring laundered at least $62 million of cash using the dormant bank accounts of 250 students who have returned to China after studying in Australia.
After a year-long investigation code-named Taipan, criminal proceeds squad detectives raided six homes, searched storage facilities and arrested five men and a woman. They seized more than $2 million at one house, illicit tobacco and four luxury cars.
Alleged syndicate members, Boliang Liu, 34, from Burwood, Tao Zhou, 38, from Box Hill and Wei Wang, 32, from Blackburn, were arrested during raids on Thursday and appeared in Melbourne Magistrates Court on Friday afternoon.
The three men were charged with money laundering, structuring charges and state proceeds of crime offences.
Structuring refers to splitting cash transactions into smaller tranches to avoid raising red flags with authorities and travelling with cash in a bid to avoid declaring cross border money transfers.
Victoria Police, backed by the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Criminal Intelligence Commission, uncovered thousands of deposits into Melbourne ATMs which were used to move money around Australian and internationally.
They believe the former students’ identities and bank details were bought by the syndicate then moved back to Australia through the dark web.
To physically move the cash, the syndicate then used “money mules”. A single student account would be used to make multiple transactions before be switched for another.
Police informant Detective Senior Constable Shaun Roberts told the court large cash amounts would be delivered or couriered to Mr Liu’s premises, before “number two man” Mr Zhou would deposit the cash into ATMs, primarily around the Chadstone, Box Hill and Burwood areas.
Police allege Mr Zhou would then contact Mr Liu by phone, who would move the money to other bank accounts and, “once it had been removed enough”, Mr Wang would be brought in to convert the money to cryptocurrency, before it was returned to the syndicate as “clean money”.
Police found around $100,000 in the boot of a Mercedes-Benz driven by Mr Wang and a further $80,000 in a plastic bag at the end of his bed, the court heard.
Mr Wang, a Chinese national with Australian permanent residency, applied for bail on Friday, with Senior Constable Roberts telling the court he had “grave concerns” the man would attempt to flee the country if he was not in custody.
“The syndicate has access to high-quality, fraudulent passports,” Senior Constable Roberts said.
“With the nature and the speed at which they were able to have these made and delivered to them, we’re quite concerned that if any one of the syndicate, including Mr Wang, is given bail they’ll have access to these documents and be able to flee the jurisdiction.”
He said Mr Wang did not have many job prospects, so if he were to get bail he may “hire himself out to do cryptocurrency for another syndicate”. Senior Constable Roberts confirmed he did not have evidence the 32-year-old had contact with other criminal organisations.
Mr Wang’s lawyer argued the risks of his client absconding could be addressed by conditions that he attend the Box Hill police station three times a week and not enter international ports. A $10,000 surety was offered to the court by a friend of Mr Wang.
On denying Mr Wang bail due to being a flight risk, Magistrate Daniel Muling noted the “seriousness” of the charges, which carry a maximum sentence of life imprisonment.
“This is a very sophisticated enterprise you are alleged to be involved in,” he said. “You play, on the evidence before this court, a critical role.”
Neither Mr Liu nor Mr Zhou applied for bail. The three co-accused have been remanded to the Melbourne Magistrates Court for a committal mention on February 18.
An Endeavour Hills man, 36, and Caulfield North woman, 31, were also arrested on Thursday before being released. They are expected to be charged on summons.
Detectives on Thursday raided homes in Burwood, Box Hill, Blackburn, Caulfield North and Endeavour Hills.
Police also seized boxes of illicit tobacco, a cash counter, electrical equipment, jewellery, high-end clothing and sporting memorabilia. Luxury vehicles were also seized including a BMW X5, Toyota Landcruiser, Mercedes C200 Coupe and a Porsche.
Police say it was the biggest specialist money laundering ring uncovered in Australia, adding that specialist money laundering syndicates are used by other gangs, including bikies, Middle Eastern crime families and Asian-based cartels to move money around the world.
The head of the Victoria Police economic crime division, Detective Superintendent Geri Porter told The Age police had uncovered “suspicious third-party deposits” stretching back 15 months. She said police had executed 13 search warrants during the raids.
The money flow in the suspect accounts became less explainable as COVID restrictions stopped the flow of students into Australia, Ms Porter said.
“This syndicate has conducted a highly mobile and agile operation, moving away from those traditional venues and outlets associated with money laundering. Of the five people arrested, four of them were not known to police and had no history of any type of criminal offending,” Assistant Commissioner of crime Bob Hill said.
“These were people living a quiet and unremarkable life in the Melbourne suburbs, all the while operating a sophisticated criminal enterprise.”
“Money laundering is not a victimless crime – these funds are used to operate criminal networks involved in a variety of crime types including the trafficking of drugs and illicit firearms.”
Mr Hill said the investigation involved the Criminal Proceeds Squad, Purana Taskforce and the Financial Crime Squad, as well as AUSTRAC and the Australian Criminal Intelligence Commission.
AUSTRAC National Manager Jon Brewer said, “Expert financial intelligence provided by AUSTRAC and our major bank partners was instrumental in identifying and targeting the syndicate.”