How Covid caught Long River money syndicate’s alleged Mr Bigs

Among the tens of thousands caught by Covid-19 in Australia in 2021 were seven Chinese business chiefs. Yet there was something unique about these victims of the virus: their side effects did not hit until yesterday.

Police arrest suspects in Melbourne as part of Operation Avarus-Nightwolf.

Among the tens of thousands who were caught by Covid-19 in Australia in 2021 were seven Chinese business chiefs. Yet there was something unique about these victims of the virus: their side effects did not hit until Wednesday.

That’s when more than 300 Australian Federal Police officers and special agents launched raids across the nation, arresting the seven and smashing their alleged international money laundering empire.

The chance but critical role Covid-19 played in the dismant­ling of the Long River syndicate’s industrial-scale enterprise is one of the most remarkable aspects of Australia’s most complex money-laundering investigation, which police say has stopped hundreds of millions of dollars in dirty cash generated by fraud, drug trafficking and violent crime flowing into and out of the nation.

In 2021, Covid-19 was spreading like wildfire through Sydney – it was no longer just an issue for Melbourne where the seven ­alleged Long River crime bosses lived. The Harbour City was like a ghost town. City and suburban shops fell mostly silent as people stayed home and the streets were quiet. Foreign students, many from China, had already gone home in 2020.

In the midst of the second year of the pandemic, the AFP was sharpening its focus on money laundering as the agency ramped up its attempts to cut off criminal gangs’ access to money – the lifeblood of organised crime – and stop it being used to fund lavish lifestyles and financing the next criminal enterprise.

Arrests were made in Balwyn and Kew on Wednesday.

It was around this time that keen-eyed agents noticed something odd in a couple of Sydney’s dead streets – life. Some shops were still pulling a crowd.

Specifically, the Changjiang Currency Exchange outlets in ­George St in the CBD and Goulburn St in Haymarket had a strong trade. Business was so good for the company that it had opened more city outlets, bringing their number in NSW to five, and joining outlets operating in Burwood, Chatswood and Hurstville.

AFP Assistant Commissioner Stephen Dametto confirmed this week that the global virus proved to be an unlikely, yet major, clue in helping the agency dismantle a global criminal operation.

“During Covid-19, AFP members were still coming into work, and while most of Sydney was a ghost town, alarm bells went off among our money laundering investigators when they noticed Changjiang Currency Exchange operating two new shop fronts in the heart of Sydney,” he said.

“It was just a gut feeling – it didn’t feel right.

“Many international students and tourists had returned home, and there was no apparent business case for Changjiang Currency Exchange to expand.”

They were slick-looking shop fronts but also fronts the AFP allege were designed to look and act like law-abiding remittance outlets used to transfer and receive funds from overseas.

With more than one million Chinese Australian citizens and strong links between the companies, there was a good business opportunity to help move money between Australia and its largest trading partner.

AFP officers arrest man in Glen Iris.

A woman is led away.

The company held both a money remitters licence and a currency exchange license, but the portion of its business changing currency for tourists and students was tiny, especially during the lean Covid times.Its main business was transferring funds across electronic borders.

Eventually, Chiangjiang Currency Exchange would grow to the point it was moving 4 per cent of all funds travelling between Australia and China.

Up to $100m a day would be moved, much of it legitimate.

But police allege that hidden within the legitimate transfers were millions of dollars of illegal money transfer, amounting to $229m in allegedly dirty money washed over the period of the 2020-22 Covid-19 pandemic.

Following their educated hunch over several months, the AFP’s anti-money laundering agents gathered intelligence and in August 2022 launched Operation Avarus-Nightwolf to specifically target the Changjiang Currency Exchange outlets and its shadow operators who controlled the Long River syndicate.

Over the past 14 months, the AFP has deployed a phalanx of intelligence gathering techniques, including covert surveillance, to build a case against Long River and the seven kingpins that led to Wednesday’s raids and arrests across Victoria, NSW, South Australia, Western Australia and Queensland.

The AFP enlisted Austrac, Australian Border Force, Australian Criminal Intelligence Commission, the Australian Securities and Investments Commission, the Australian Taxation Office and the US Department of Homeland Security Investigations to join ­forces for Operation Avarus-Nightwolf.

AFP investigators used five forensic accountants and undercover operatives to help plan and execute the takedown of Long River.

Investigators picked their way through bank statements, tax records, identity documents and thousands of other financial records during the probe.

Assistant Commissioner Dametto said Avarus-Nightwolf was led by the best money laundering investigators, forensic accountants and asset confiscation teams within law enforcement.

“Starting with a handful of members, the investigation team rapidly expanded to include 42 AFP members who worked to build the criminal case, while the (asset confiscation team) traced assets that were allegedly purchased by the syndicate using the proceeds of their criminal conduct,” he said.

One of the challenges was that some of the $229m targeted in the operation involved crypto-­currency transactions in addition to the traditional money transfers.

The AFP will confiscate the cryptocurrency and transfer the digital fortune to an AFP-­controlled crypto wallet pending the outcome of the myriad criminal charges that will flow from Wednesday’s raids.

Austrac’s Acting Deputy CEO, Brad Brown, said the money-tracking authority’s financial intelligence expertise was critical in disrupting the alleged global dirty cash washing operation.

“Austrac’s unique capability to follow the money as it moves through the financial system, crosses international and digital environments – transforming from cash to cryptocurrency – flushes out suspicious transactions linked to crime,” he said.

“Austrac’s financial intelligence analysts have specialist skills enabling us to surface complex money laundering methodologies and identify property, high value assets, and key players in this operation. In our role as a regulator, we actively monitor high-risk entities across the banking, gambling, remittance, and virtual assets sectors.

“We conduct supervision campaigns and assessments and take decisive action where we detect ­serious and systemic non-­compliance or criminal activity.

“Remittance businesses provide a critical service to the community, and the vast majority operate legitimately. However, the nature of the business means remitters are at a higher risk of exposure to money laundering, terrorism financing and other serious crimes.

“The onus is squarely on remittance businesses to understand and comply with their anti-money laundering and counterterrorism financing obligations.”

Acting ABF Assistant Commissioner Clinton Sims hailed the operation as a major blow to crime, and said foreign nationals convicted over their roles in the enterprise faced being kicked out of Australia. “The integrity of Australia’s visa and migration programs is critical to our economic prosperity. This operation highlights the emphasis the ABF and our partner agencies place on ensuring criminals can’t exploit our visa system,” he said.

“We are working to assess the cancellation of the visas of foreign nationals involved in this syndicate and their possible subsequent removal from Australia.”

ASIC deputy chair Sarah Court said the operation would contribute “towards a fair, strong and ­efficient financial system for all Australians”.

ATO Deputy Commissioner John Ford said money laundering helped criminals commit tax fraud. “These outcomes should send a clear message to those who think that they can hide illicitly sourced money, that they will be caught,” he said.

ACIC executive director intelligence operations Jennifer Hurst said the operation delivered a blow to money laundering. “Taskforce Avarus exemplifies what can be achieved through multi-agency collaboration and co-operation.

“By tirelessly targeting key players, we will continue to dismantle these alleged criminal networks and focus on keeping Australian communities safe.”

US Department of Homeland Security Investigations US regional attaché Ernest Verina said: “The outcome of this investigation exemplifies the exceptional co-­ordination and collaboration between Australian and US law enforcement agencies.”

As one AFP figure remarked as the raids were unfolding, Operation Avarus-Nightwolf represents a proud day for the “biggest nerds” within the agency. “We have people who do a job for 14 months or in some cases even 10 years, working on the same job. They are highly intelligent, highly educated and highly skilled investigators.”