‘Danger’: Aussies fear over collapsed company

The company had alleged links to a $228 million money laundering operation but thousands of Aussies have been caught up with a dispute over money.

Seven former employees linked to a collapsed firm have been charged over alleged links to a $228 million money laundering operation, which has left hundreds of Australians facing a “painful” battle, with their money trapped for over a year.

Around 250 investors have banded together to slam the liquidation process, describing themselves as “victimised customers” of the collapsed trading platform.

The Australians claim they continue to endure a lengthy wait for the return of their money, which overall tops $20 million, and they worry the liquidators are issuing what they see as an “excessive” bill that could impact the return of their funds.

The trading platform Prospero was ordered into court liquidation in April last year after the Australian Securities and Investments Commission (ASIC) had the company wound up.

It came to the attention of the corporate regulator after more than 240 Australian Federal Police raided premises across the country in October last year, later alleging that syndicate members amassed a significant amount of illegal wealth allowing them to live the “high life”.

A search warrant at an Adelaide shopfront. Picture: AFP

Insolvency firm BRI Ferrier were appointed to oversee Prospero’s liquidation but investors have raised concerns about the “danger” their money could be under.

The matter returned to the Federal Court of Australia last week for a hearing as liquidators applied to access Prospero’s $20 million trust funds to help pay off their liquidation bill.

News.com.au has also sighted a letter from ASIC sent to the liquidators raising “numerous” and ongoing complaints from investors with 11 criticisms raised.

Court records show that BRI Ferrier estimates their bill for the Prospero liquidation could be as high as $3.64 million.

One Australian investor told news.com.au that 250 clients collectively opposed the liquidators gaining access to the $20 million fund, describing the move as “not fair” and a “danger”.

The AFP also alleged that syndicate members were able to amass a significant amount of illegal wealth from their criminal activity.

The investor has more than $10,000 tied up in the collapsed company’s accounts and said like hundreds of others, they are been desperately waiting for the return of their money.

“The sudden closure of the company has frozen our funds. For a year now, we can’t get our money back, the liquidation process is dragging on and the cost that the liquidator has claimed is growing astronomically, amounting to over $3 million,” they said.

“The amount of money that was left in the company’s administration account is not enough to cover the liquidator’s cost. So they are seeking to combine the administrative account with the trust account so that it becomes a pool, and the liquidator will have priority to be paid from it first.”

Do you have a story? Contact [e-mail]

A search warrant at Changjiang Currency Exchange in Sydney CBD was executed as part of Operation Avarus-Nightwolf.

But this means investors would not receive all their funds back. Some investors had refinanced their properties to trade on Prospero’s platform and were now paying interest on money they currently could not access, one said.

The corporate regulator also weighed into the issue with a letter sent to BRI Ferrier in February this year outlining that ASIC had received “numerous queries and complaints from investors in Prospero, including the group with whom we met on 17 December 2024” in relation to the liquidation.

The letter raised a number of complaints including that the process for distributing client money has taken too long, resulting in investors suffering financial hardship, and the Federal Court should not be involved for a “straightforward matter of returning money”.

“The remuneration claimed by the liquidators’ is excessive (for example) senior staff are performing work more appropriately performed at a junior level, the liquidators have incurred fees for communicating with clients, the process for verifying client identifies has been unnecessarily costly and inefficient,” the letter read.

Seven employees linked to the firm have been charged over alleged links to a $228 million money laundering operation

But a spokesperson for BRI Ferrier said the Prospero liquidation is a highly complex matter that the company has been working diligently to resolve on behalf of clients, former employees, unsecured creditors and regulators.

“As a primary focus, BRI Ferrier has been seeking to have funds returned to the clients as quickly as possible, but it is important that the liquidation follows correct legal processes,” they said.

“As part of its efforts to expedite resolution, BRI Ferrier applied to the Federal Court to seek directions on key legal points, including the thousands of potential offshore clients with claims in the millions of dollars.”

They added detailed evidence and submissions were made and BRI Ferrier tendered as evidence the various critiques from clients that had been submitted to ASIC anonymously.

“To be clear, no complaints have been made by ASIC,” they added.

“Rather, it appears that some clients made complaints with the desire to seek recovery of their funds, seemingly not understanding the multifaceted nature of this matter and the work required to be undertaken before a distribution is made.”

The AFP also alleged that syndicate members were able to amass a significant amount of illegal wealth from their criminal activity.

$60,000 in interest a month

Investors also raised concerns that their money would not be returned until June this year, according to court documents.

Justice Cameron Moore noted in a hearing last week that investors might be “significantly impacted depending on how desperate their need for the money” in discussions about the timeline for paying investors back.

The court heard that if liquidators were able to take payment for their fees from the trust fund then investors would receive 97c in the dollar and unsecured creditors, which have debts of up to $4.4 million, would be given a bigger return.

“We are very worried about when and how much money we can get back,” the investor told news.com.au.

The scale of the platform’s reach was revealed in court last week with 2100 investors in Australia alone and potentially 33,000 overseas clients

The $20 million fund with client’s money has also accrued approximately $60,000 a month in interest and now sat at $658,000.

Luxury goods seized during raids by AFP. Picture: AFP

Arguments were heard in court that Prospero’s contracts revealed that any interest would be held by the company. However, investors want to see a share of the interest.

“The money is holding in our trust account, we can’t use it, we can’t get it back and this interest to us, it’s like a compensation for all the time our money has been locked,” one investor said.

The court also heard that there were 365 investors who had not provided bank details amounting to $1.4 million, which would be handed to ASIC at the end of the liquidation, if they did not come forward.

The AFP seized a number of items.

BRI Ferrier’s spokesperson also defended the liquidation fees and said they are in line with the work required in such a complex matter.

“The court will determine where those costs are to be paid from, and the resulting impact on creditors. The intersection of insolvency and financial services businesses is a difficult area of law, and each matter requires careful consideration of the respective stakeholders interests, which has been put to the court,” they said.

“BRI Ferrier notes that court orders are yet to be handed down and so it is not appropriate to comment further at this time.”

An ASIC spokesperson said the corporate regulator took action to wind up Prospero because it was seriously concerned about the management of Prospero’s business.

“In granting the order to wind up Prospero, the court accepted that there was a risk to the public interest warranting protection,” they added.

“The liquidators have sought directions from the court about the appropriate source of funds to cover their fees for dealing in and distributing client money. This will be a matter for the court to decide.”

Watches and luxury cars were seized by police.

Alleged money laundering links

Prospero operated a foreign exchange broking and trading business in Australia and offered investors access to high-risk financial trading products.

The AFP revealed seven members of an alleged Chinese organised crime syndicate were accused of secretly running a prominent, multibillion-dollar money remitting chain in Australia.

These members were charged under the most complex AFP-led money-laundering investigation in the nation’s history, it noted.

The Changjiang Currency Exchange, which the AFP alleged is being secretly run by the Long River money laundering syndicate, is accused of laundering almost $229 million in the proceeds of crime in the past three years.

Luxury goods seized during raids by AFP. Picture: AFP

ASIC commenced its investigation into Prospero following the AFP’s investigation dubbed Operation Avarus-Nightwolf.

They executed 20 search warrants across every mainland state and seized $50 million in lulxury property and vehicles .

The 14 month investigation by the AFP resulted in seven former employees of Prospero being charged with money-laundering offences in October 2023 relating to the Changjiang Currency Exchange money remitting chain, ASIC said.

The business allegedly laundered $228,883,561 between 2020 and 2023 with allegations some of the laundered money was from proceeds of crime, including from online scams and trafficking of illicit goods.

The current director of Prospero is not charged or accused of any wrongdoing.

The corporate regulator did not identify the alleged Changjiang money launderers with roles at Prospero.

The 14 month investigation by the AFP resulted in former employees of Prospero being charged with money-laundering offences in October 2023.

The company’s Australian Financial Services Licence was suspended in December 2023, after Prospero failed to lodge its 2023 audited financial accounts, and it remains suspended.

The Changjiang Currency Exchange had 12 modern-looking shop fronts in every mainland state in Australia and supplied resources to customers about the country’s anti-money laundering laws.

However, the AFP have alleged this was the company’s attempt to look and act like a law-abiding remittance company.

The AFP have alleged it identified links between known money laundering organisations and the Changjiang Currency Exchange, which came to the attention of investigators when the company opened new and updated existing shopfronts in Sydney during Covid-19 lockdowns.

The Changjiang Currency Exchange has transferred in excess of $10 billion in the past three financial years, according to the AFP.

Luxury goods seized during raids by AFP. Picture: AFP

While most of these funds were from customers engaged in lawful actions, the AFP have alleged the company facilitated a system for organised criminals to secretly transfer unlawfully-obtained money in and out of Australia.

Some of alleged money laundered by the syndicate was from the proceeds of crime, including from cyber-enabled scams, the trafficking of illicit goods and violent crimes, the AFP alleged. The syndicate allegedly would coach its criminal customers how to create fake business paperwork, like false invoices and bank statements, the AFP claimed.

It is also alleged this enabled criminal customers and the Changjiang Currency Exchange to show authorities that unlawfully-gained money was from lawful sources in the event the transfers came to the attention of authorities.

Seven members of an alleged Chinese organised crime syndicate accused of secretly running a prominent, multibillion-dollar money remitting chain in Australia have been charged under the most complex AFP-led money-laundering investigation in the nation’s history. Picture: NCA NewsWire / David Crosling

‘Lived the high life’

The AFP has accused the Changjiang Currency Exchange of transferring unlawfully-obtained funds to national and international accounts by claiming it was the legitimate business profits and business expenses of their customers.

The alleged co-mingling of legal and illicit funds enabled the company to transfer up to $100 million a day for customers in Australia and throughout the world, with the volume of transfers masking the alleged laundering of tainted funds.

AFP Eastern Command Assistant Commissioner Stephen Dametto said it would be alleged the highly-organised syndicate purchased false passports for $200,000 each, which could have enabled members to flee the country in the event law enforcement agencies became suspicious.

The AFP also alleged that syndicate members were able to amass a significant amount of illegal wealth from their criminal activity.

“We allege they lived the high life by eating at Australia’s most extravagant restaurants, drinking wine and sake valued in the tens of thousands of dollars, travelling on private jets, driving vehicles purchased for $400,000 and living in expensive homes, with one valued at more than $10 million,” Assistant Commissioner Dametto said.

The court heard the AFP is also holding on to cryptocurrency linked to Prospero. An AFP spokesperson said the matter remains before the court.

[e-mail]

Originally published as ‘Danger’: Aussies fear over collapsed company