Casino high-roller Chinatown Tom hit with $54m tax bill
An accused Melbourne crime figure has been hit with a monster tax bill as he rots in a Chinese prison amid probes into his possible links to money laundering, illegal prostitution and human trafficking.
Police & Courts
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Accused crime figure and Crown Casino high-roller Tom “Mr Chinatown” Zhou has been hit with a $54m tax bill as he rots in a Chinese prison.
The tax office has frozen a string of properties, including a Toorak mansion, linked to the 54-year-old, an Australian citizen at the centre of a secret police investigation into money laundering, illegal prostitution and human trafficking by serious organised crime groups.
In Federal Court documents, ATO investigators have also accused the Melbourne man of arranging a sham loan and his wife of tax evasion over the sale of their vast food market in Wuhan, China.
Hong Kong court documents show Zhou was accused of organising his driver to attack a business rival with sulfuric acid as part of a dispute over the market, leaving the victim’s face permanently scarred and unwilling to give evidence against him.
Zhou, who is believed to have spent the last three years in a Chinese prison and is unlikely to be released for at least another five years, has hit Aussie headlines for bankrolling the Chinatown junket, which brought highrolling Chinese gamblers to Crown’s casinos.
He was also accused of running an illegal wombat hunting lodge on a property in Murrindindi, 100km northwest of Melbourne, that he planned to turn into a luxury hotel.
The high-roller donated to the NSW Labor Party and was pictured with ex-premier Dan Andrews at an Australia Hubei Association function in 2012.
Zhou was a primary target of an operation probing junket operators at Crown connected to Asian organised crime groups, according to a confidential post-investigation review conducted by Victoria Police’s Organised Crime Intelligence Unit in August 2020.
“A number of these AOC (Asian organised crime) entities are heavily linked to syndicates with previous history of human trafficking, drug trafficking, extortion and money laundering within Victoria,” police said in the report, which was tendered to a Victorian royal commission into Crown.
The investigation focused on “money that had come out of Crown Melbourne into a known entity who was affiliated with the illegal sex industry and the karaoke bar industry in the Melbourne CBD”, a police officer who cannot be identified told the royal commission.
Ming Chai, the nephew of Chinese President Xi Jinping, is named as Zhou’s associate in the secret report.
Back in China, where he was born, Zhou was in business with Ming Chai and ran other companies including the Baizhazhou Agricultural By-Product Grand Market, which is central to the ATO’s tax probe.
The Herald Sun can reveal that the Federal Court in August granted freezing orders barring Zhou’s wife, Wang Xiu Qun, also known as Wendy Wang, and their 23-year-old son from selling $30m in property including a half share of a seven-bedroom mansion on Hopetoun Rd, Toorak, and apartments on St Kilda Rd and in Southbank.
Both are still living in Melbourne.
A trove of confidential documents filed with the court show that the ATO hit Zhou with the monster tax bill in 2021 following a lengthy investigation in which it alleged he reaped income of $45.4m over 2012 and 2013 — years where he declared total income of less than $14,000.
The $54m bill was significantly inflated by interest and penalties “because you (Zhou) or your agent made a false or misleading statement”, ATO documents filed with the court show.
Zhou told the ATO that the cash was explained by loans from two companies he controlled in Wuhan that were cashed up after selling seafood businesses.
But the ATO said the loans were a sham, lacking business, commercial or common sense because they were not enforceable in Australia, not made at a market interest rate, and Zhou continued to control the lenders.
The ATO also claims that his wife made more than $62.5m between 2008 and 2014 — a period during which she declared income of about $370,000.
Ms Wang’s average income of $53,000 a year was “significantly short of your average annual personal expenditures of over AUD $250,000,” the ATO said in a paper explaining its position to her, filed with the court.
“Your income does not explain how you afforded four Australian property purchases costing over AUD $27 million.”
The ATO claims the bulk of Ms Wang’s undeclared income came from selling her 70 per cent of the market in Wuhan.
She agreed to sell her stake to Hong Kong company China Agri-Products Exchange for HK$900m ($139m) in 2007, but claims not to have received all the money amid bitter and lengthy legal battles over allegations her husband refused to hand over the business and that market management used dodgy accounting to inflate its price.
For selling his 30 per cent stake in the market, Zhou received HK$360m ($55.8m) worth of shares in China Agri-Products Exchange.
Ms Wang settled her stoush with the ATO in 2020 by agreeing to pay $11m in tax.
Her solicitor, Mark Harrick of FCW Lawyers, did not answer detailed questions.
However, her tax accountant, Chooi Beh, said the tax issue was delayed by a Hong Kong court case over the sale of the market.
China Agri-Products Exchange launched the lawsuit against Ms Wang in 2011 but it took a decade to resolve, held up by difficulties serving court documents on her and a series of related legal stoushes in mainland China.
In a 2021 judgment, Justice David Lok said China Agri-Products executives were told that “Zhou, with his powers and connection in Wuhan, would resort to extreme measures to maintain his control over … the market”, and said there were allegations executives were blackmailed and employees assaulted.
During a raid on the market’s office, mainland police found a document titled “detailed schedule of fictitious construction works” that was used to pump up the value of the business, Justice Lok said.
He found Ms Wang was “economical with the truth” while giving evidence and said she was “put forward as a ‘puppet’ with a view to protect those who were mainly responsible for the transaction including her husband”.
And he said it was understandable that one of China Agri-Products Exchange’s former executives didn’t want to come forward and give evidence “after the sulfuric acid attack on him in November 2008 that caused permanent injury to his face”.
He said Zhou’s driver was among three people sentenced to 13 years jail in China over the assault, and China Agri-Products Exchange believed “Zhou was behind the attack”.
Mr Beh said Zhou told him that “the Chinese government has taken over the market”.
Zhou left Melbourne in September 2019, travelling on his Australian passport.
In Fiji, he was taken “against his will possibly by Chinese authorities”, according to his lawyer, Paul Sokolowski, of Arnold Bloch Leibler.
In court documents, Mr Sokolowski said a missing persons report was filed in January 2020 with the Department of Foreign Affairs and Trade for the man whose “current whereabouts are unknown”.
“It appears that Mr Zhou has been the victim of an extrajudicial rendition to, it is presumed, China,” Mr Sokolowski said in an email at the time.
Given the “extraordinary and disturbing circumstances”, along with an “immense level of concern and anxiety” from his family, Mr Sokolowski asked that the tax fight be put off.
Court documents show that in 2022 Mr Beh told the ATO that Zhou had been “held against his will in China and that his family had no communication with him”.
The reasons for Zhou’s detention are unclear but Mr Beh told the Herald Sun he was “initially charged for economic crimes”.
In February Ms Wang’s lawyer, Catriona Battaglia, told the Federal Court that Zhou was “completely uncontactable”.
“My client has no idea where he’s being held and has not had any contact,” she said.
“To my knowledge there has been no fruitful communication from the Australian consulate in this regard.
“So it’s not a matter of Mr Zhou refusing to deal with matters. It’s quite frankly the fact that he presumably physically cannot.”
A DFAT spokesman said it was “providing consular assistance to the family of an Australian reported missing”.
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