‘Pig butchering’ romance scam linked to $228m money laundering case
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A $228 million transnational money laundering syndicate allegedly took money from a “pig butchering” romance scam that targeted people looking for love and tricked them into bad investments.
One of the accused money laundering ring leaders, 37-year-old Balwyn father Zhou Chen, was released on bail with onerous conditions on Thursday, including house arrest and a compulsory ankle monitoring device, despite police fearing he might flee overseas in a private jet.
Jin Wang (centre) outside the Melbourne Magistrates’ Court on Thursday, out on bail.Credit: Joe Armao
The syndicate allegedly funnelled money into bank accounts set up in the names of relatives and associates, the court was told, with seven people arrested last week over their alleged involvement. Close to 350 bank and cryptocurrency accounts were now being analysed.
Three others allegedly linked to the company also faced court on Thursday, including Jin Wang, Jing Zhu and Chen’s wife Jie Lu, where they were all granted bail.
Melbourne Magistrates’ Court heard Chen allegedly spoke to a co-accused about meeting up to “get our stories straight” before being arrested on allegations he operated Changjiang Currency Exchange, with others, to launder millions over the past three years.
The court heard the company, which operated 12 retail shopfronts across Australia, now stands accused of being used as a front to transfer money to illegitimate customers and conceal about $228 million from regulators.
While 98 per cent of Changjiang Currency Exchange transactions were legitimate, 2 per cent were allegedly money laundering for criminal organisations, the court was told.
Police allege Chen, an Australian citizen born in China, received 30 per cent of profits made by the exchange and fabricated how much he was receiving when dealing with the Australian Taxation Office. This included reporting an annual income of less than $50,000 during the last financial year, while residing in a mortgage-less $10 million home in Balwyn.
In opposing bail, Detective Senior Constable Thomas Martin said the Australian Federal Police alleged the syndicate disguised the source of money, property and other assets, which he said were proceeds of organised crime.
Jie Lu at the Melbourne Magistrates’ Court, out on bail.Credit: Joe Armao
Martin said police believe the syndicate took over a contract to launder the proceeds of a scam after AFP officers earlier arrested seven people in a separate case. It was then, he said, Chen and the syndicate allegedly “agreed” to take over for a 10 per cent share of all money they moved.
The detective said police intercepted “thousands of hours” of phone calls between members of the ring, including Chen, during the past year.
During one such call, Chen allegedly told an associate about their alleged profits from a “pig butchering” romance scam, which they were contracted to by a Chinese criminal network.
“We f—ing accepted about $100 million right?” Chen allegedly said on the call.
Pig butchering is a cross between a romance and cryptocurrency scam and alludes to the idea of victims being “fattened up for the slaughter” with the belief they are falling in love.
The officer said Chen and a co-accused also spoke about the federal police investigation during a phone call, where one of the two men said: “We can meet up again to get our stories straight.”
Chen is alleged to have flown to Singapore in August when he met with a co-accused, opened a bank account and spoke to an accountant and a solicitor.
Martin said police believed Chen also had business operations in Vietnam, Cambodia and Malaysia, where he had begun to set up a small business team to operate in the “grey area”.
Police are now expected to spend coming months transcribing thousands of hours of intercepted phone calls, which need to be translated from Mandarin into English, and trace the syndicate’s many accounts and assets.
Crown prosecutor John Saunders opposed Chen’s bail and said police believed there was a serious risk of him interfering with witnesses, tampering with evidence, and trying to flee overseas, as the 37-year-old was found to have a $100,000 credit with a private charter company.
However, Chen’s legal team, which included lawyers from law firm Doogue + George, and barrister Dermot Dann, KC, said the accused man intended to fight all charges with a trial likely to be three years away.
Magistrate Malcolm Thomas granted Chen bail on the condition he doesn’t leave his home, surrender his passport and give police the details of all his bank details, mobile phones and IP addresses within 24 hours of his release.
Chen’s parents also put their Templestowe home, worth more than $1.3 million, as a surety.
Another three co-accused were arrested last week and remain behind bars.
Jing Zhu at the Melbourne Magistrate’s Court, out on bail.Credit: Joe Armao
Last week, this masthead revealed the transnational crime syndicate stood accused of laundering $228 million in dirty funds and tainted cryptocurrency via a money-moving business spruiked by a former Howard government minister and allegedly secretly controlled by Chinese gangsters.
Federal police from Operation Avarus-Nightwolf swooped on seven suspected Melbourne members of what agents called the “Long River” – an Australia-wide crime syndicate – accusing them of serious financial crime.
Police allege the syndicate laundered funds via the Changjiang remittance empire, which the crime group allegedly controlled and which was also used by unwitting members of the Chinese-Australian community to send billions of dollars abroad.
The Long River syndicate, police allege, instructed its organised crime customers on how to disguise the movement of suspected dirty funds by using false invoices and other cover stories when sending funds to and from China, Australia and other destinations via Changjiang remitters.
The matter will return to court in March 2024.
With AAP
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