Biggest money laundering case in Australia’s history surfaces

For allegedly laundering nearly 230 million Australian dollars in the past three years, the Australian Federal Police (AFP) recently raided Changjiang Currency Exchange (CJCE) and arrested the main person in charge.

When the news broke, the entire Australian Chinese community was shocked. The incident is still unfolding.

Chinese currency exchange, a one-night explosion

After 14 months of investigation, the Federal Police launched a nationwide operation on October 25th, deploying more than 240 police officers and 92 specialists to conduct searches of CKI offices and related personnel’s homes in Melbourne, Sydney, Brisbane, Adelaide and Perth. The operation resulted in the arrest of seven people in Melbourne and the seizure of luxury cars and property valued at more than $50 million. According to a statement issued by the Federal Police, the seven suspects are aged between 33 and 40, four of whom are Chinese nationals and three of whom are Australian citizens.

Established in 2012, CJCE has 12 money exchange outlets across Australia and is one of the largest independent remittance organizations in the country.During the Covid pandemic, many international tourists and students in Australia had already returned to their home countries, but CJCE opened new business outlets without any obvious reason for business expansion, which aroused the suspicion of the police. Over the past three years, CJCE has transferred more than A$10 billion, most of it in legitimate transactions, but at the same time, federal police have accused the crime syndicate Long River of secretly operating CJCE and using it to launder nearly A$229 million in criminal proceeds between 2020 and 2023.

The investigation, called Operation Avarus-Nightwolf, is one of the most complex investigations in Australia’s history. Since August 2022, the Australian police, in conjunction with the U.S. Department of Homeland Security Investigations (DHSI) and six other law enforcement agencies, have been conducting an anti-money laundering investigation, which has lasted 14 months and has finally closed the net. CJCE appeared to be a legitimate business, but in fact was suspected of colluding with criminal organizations to conceal and divert the latter’s illicit proceeds, including income from cyber fraud and illegal trafficking. What makes this investigation so complex is that the criminal enterprise “operated in plain sight,” with glitzy storefronts all over the country, rather than in the shadows like other money laundering organizations.

Members of the gang live in luxury, spending their money “in plain sight” in Australia’s most exclusive venues. They lived in luxury homes, drove luxury cars and traveled by private jet, with one home valued at more than $10 million. In addition, members of the gang also purchased fake passports costing AUD 200,000 each, so that they could abscond from the country when they were caught in the act. However, the net of justice is not wide enough to catch up with them. At present, due to the company suspected of money laundering, due to the money exchange company Changjiang Currency Exchange (CJCE) suspected of money laundering, the company’s turnover in three years more than 10 billion Australian dollars company’s business license has been revoked.

Wide-ranging Implications

In January 2022, the CJCE Group posted a video on its YouTube channel stating that Gary Hardgrave, a “former Deputy Minister for Immigration” in Australia, had “officially joined Changjiang Currency Exchange (CJCE)” as the company’s “Head of Immigration Funding Security”. In the video, Mr. Hardgrave describes the company as a “great Australian company with a growing business”. Mr. Hardgreaves was Minister for Citizenship and Multicultural Affairs (2001-2004) and Minister for Careers and Skills (2004-2007) under Howard. Mr. Hardgreaves also listed in The Link’s archives that he had been a director of CJCE from January 2022 to the present, and had posted a congratulatory message to CJCE on the opening of its new store in Sydney.

Mr. Hardgreaves was shocked by the allegations against CJCE, which have shaken Australia, and has terminated all dealings with the company. Asked by the Australian Financial Review (AFR) about his role at CJCE, Mr. Hardgreaves said he was only hired to help promote the company’s business and was not involved in its day-to-day operations. There is no evidence of any wrongdoing by Mr. Hardgreaves.

However, when retired Australian officials stake their reputations on Chinese companies, many of them know that their reputations give them a good image. Often they are invited to become executives of the group, but they are not involved in the administration or management of the business, and they have no knowledge of the specifics of the business. They deny any direct involvement when problems arise in these businesses. It is worth considering whether they are really “innocent” of being implicated when they “sold” their own brands for profit and helped these enterprises to be accepted by society.

The amount of money involved in this case is huge, the impact is extensive, and many people and companies are involved – the four major banks in Australia, Bendigo Bank and Changjiang Currency Exchange have business dealings with each other, and none of them has been spared. A number of bank staff were unwittingly implicated in facilitating the alleged criminal enterprise. Federal police are investigating whether staff at Australia’s major banks were involved in the money laundering. National Australia Bank was quick to respond, stating that it has “zero tolerance for all criminal behavior, especially when it involves its customers as well as its staff,” noting that the bank has been cooperating with the federal police in their investigation of the case since December 2022 and has provided relevant information and surveillance video to the police.

It is worth noting that the 14-month Australia-wide Operation Avarus Nightwolf was supported by the Australian Anti-Money Laundering Action Center (AUSTRAC), the Australian Border Force (ABF), the Australian Criminal Intelligence Commission (ACIC), the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and the U.S. Department of Homeland Security Investigations (HSI). Investigations (HSI). The financial intelligence expertise of AUSTRAC, in particular, was critical in supporting the Australian Federal Police in investigating and dismantling this alleged large-scale transnational money laundering operation.

Illegal Enticements Money Laundering Paradise

Changjiang Currency Exchange legally operates an exchange service, with up to tens of millions of dollars of service per day, mixed with illegally obtained funds that are not easily detected by the transfer of funds disguised as legitimate funds with false paperwork. For example, it is not uncommon for large sums of RMB funds in China to be exchanged to Australia under different accounts with forged documents for legitimate business transactions. As there are many people doing business in China and Australia, it is common to see requests on social media platforms to deposit RMB in China and receive AUD in Australia, which is an illegal business activity in China and makes it impossible for the government to track the inflow and outflow of funds in Australia. Many of these are linked to money laundering activities.

Some students are involved in these illegal transactions. There are cases where students set up companies under the guise of business activities, but in reality they are involved in money laundering activities, mixed with non-existent business transactions, resulting in the transfer of funds that are untraceable. Some participants may mistakenly believe that they are managing investment funds without realizing that they are involved in illegal activities.

Australia has long been a favorite destination not only for the wealthy, but also for cross-border money laundering. There is virtually no vetting, information verification or background checks on business organizations. As a local law enforcement officer joked, going to the post office to pick up a parcel requires more identity verification than registering a company. In addition, Australian law also lacks supervision and endorsement of the information of beneficial owners of companies, which makes some cross-border organizations take advantage of the legal grey area to move illegal funds. However, according to the laws of each state in Australia, money laundering is a very serious economic crime. If found guilty, the maximum penalty is 20 years’ imprisonment. One of the seven suspects arrested, a 37-year-old man living in the eastern Melbourne suburb of Balwyn, has been charged by police with two counts of “conspiracy to deal with the proceeds of crime”; if convicted, he could face up to life in prison.

Australia’s largest and most sophisticated money laundering ring is suspected of cybercrime, drug trafficking, cryptocurrency and violent crime. The latest defendant is linked to a fraud ring operating in the United States. Federal Police Investigations Commander Kate Ferry said the group of defendants behind the scam deceived victims into believing they were receiving a high return on their investment; that much of the money deposited into Australian bank accounts or wired from CJCE was linked to the development of an investment app called MetaTrader and other platforms for foreign exchange and cryptocurrency trading; and that one of the key features of the scam was that it was a “money laundering” scheme, which was based on the idea that the victims would be able to trade in foreign currencies and cryptocurrencies. A key feature of the scam was

the syndicate’s ability to produce proprietary software compatible with legitimate trading platforms to distort the true market value of currency exchange rates. Federal police allege that the syndicate used Chinese nationals living in Australia, mainly on student visas, to register fake Australian companies and trading licenses with ASIC. It used these Chinese nationals to open bank accounts in Australia, most of which were associated with fictitious businesses, and then used these fictitious businesses, substitute directors and bank accounts to launder the fraudulent funds through the Changjiang Currency Exchange.

Chinese money laundering in Australia is nothing new. Earlier this year, Australian police uncovered a money laundering ring involving more than tens of billions of dollars, and it was also linked to the “rice laundering case”. The police searched Burwood, located in Sydney’s Chinese community, and searched all sources of luxury cars and houses, arrested nine officers, and seized 150 million Australian dollars in assets. Two of them are said to be Chinese gangsters, and their personal wealth is estimated to total more than $1 billion. The gang has been laundering money from criminal activity for multinational crime syndicates from 2018 to 2022. Last year, Australia uncovered a Chinese transnational drug trafficking and money laundering case with a large amount of cash and drugs at the scene, and then there was the transfer of more than A$1.4 billion in assets over eight years from the Chinese-owned ACSF International Trading Company.

In particular, after the outbreak of the Covid pandemic, the number of Chinese people coming to Australia to study and travel has decreased dramatically, which makes the exchange agency’s income seriously damaged. And this also greatly become the CJCE exchange legal business to do so large scale but still want to take the risk of doing illegal business, after all, the formal pipeline profit is getting less and less, while the profit rate of illegal transfer is very tempting. Capital is afraid of no or too little profit, just as nature is afraid of a vacuum. Once there is a suitable profit, capital will be bold. If there is a 10% profit, it is guaranteed to be used everywhere; if there is a 20% profit, it becomes active; if there is a 50% profit, it takes risks; for a 100% profit, it dares to trample on all the laws of the world; and if there is a 300% profit, it dares to commit any crime, even at the risk of being hanged. The explosion of the Changjiang Currency Exchange demonstrates to the world the evil in human nature, the contempt for the rule of law in Australia, and the strong desire for money. But this is ultimately a road of no return.

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