Victoria Police smash alleged money laundering ring that used Chinese student identities to wash cash

Australian bank accounts belonging to Chinese students and bought on the dark web were allegedly used to funnel tens of millions of dollars offshore.

Police in Victoria have smashed what they believe to be one of Australia’s largest ever money laundering operations, which allegedly moved tens of millions of dollars offshore using dormant bank accounts belonging to international students who had since left the country.

Five people were arrested on Thursday following a year-long, joint-agency investigation involving Victoria Police, AUSTRAC and the Australian Criminal Intelligence Commission, after search warrants were executed at nine properties in Burwood, Box Hill, Blackburn, Caulfield North, Oakleigh and Endeavour Hills.

Police seized what is believed to be several million dollars in cash, boxes of illicit tobacco, a cash counter, electrical equipment, jewellery, high-end clothing and sporting memorabilia.

Luxury vehicles were also seized including a Porsche, BMW X5, Toyota Landcruiser and Mercedes Coupe C200.

A 32-year-old Burwood man, a 38-year-old Box Hill man and a 32-year-old Blackburn man were all charged with Commonwealth money laundering and structuring charges, as well as state proceeds of crime charges.

They faced Melbourne Magistrates Court this morning.

A 36-year-old Endeavour Hills man and a 31-year-old Caulfield North woman were both released and are expected to be charged on summons.

Police say it is one of Australia’s largest ever money laundering syndicates.

Several luxury cars were seized including a BMW X5.

“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 Bob Hill from Victoria Police Crime Command said in a statement.

“These were people living a quiet and unremarkable life in the Melbourne suburbs, all the while operating a sophisticated criminal enterprise.”

Victoria Police commenced an investigation in October last year after a tip-off from AUSTRAC about suspicious third-party deposits, which involve a person depositing funds into another person’s account.

Police will allege that some of the accounts had been sold by their holders to the crime syndicate for use in money laundering.

The Age reports the syndicate allegedly bought identities and bank details on the dark web of hundreds of Chinese students who had since returned home after studying in Australia.

“Money mules” would then be used to physically move the cash, with a single student account being used to make multiple transactions before moving onto another, according to the newspaper.

Police allege more than $62 million was transferred over the last 12 months.

The group allegedly controlled more than 250 bank accounts.

Police will allege a wide variety of different ATMs were used across Melbourne to facilitate this process.

Detective Superintendent Geri Porter, head of the Victoria Police economic crime division, told The Age the activity in the suspect accounts became less explainable with Covid-19 restrictions stopping the flow of international students.

“This syndicate has conducted a highly mobile and agile operation, moving away from those traditional venues and outlets associated with money laundering,” she said.

The syndicate allegedly controlled more than 250 bank accounts, which had been used to transfer more than $62 million over the past 12 months.

That makes it the largest ever money laundering operation using this methodology in Australia, police say.

Mr Hill stressed that money laundering was “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,” he said.

“Yesterday’s results demonstrate how criminal behaviour continues to evolve, while law enforcement and investigation methodology adapts accordingly.

“Victoria Police and its partners will do everything they can to hold offenders to account while ensuring those involved in serious and organised crime do not retain any advantage, financial or otherwise, from their nefarious criminal ways.”

AUSTRAC national manager Jon Brewer said the arrests had “demonstrated the importance of collaboration between AUSTRAC, financial industry partners and law enforcement to disrupt and prevent organised criminals from exploiting the financial system and harming the community”.