Italy police crack down on Chinese shadow network laundering mafia money

In a fresh raid on a network of Chinese money brokers who are accused of laundering more than 50 million euros ($52.5 million) from drug trafficking organisations including the ‘Ndrangheta mafia, Italian police made 33 arrests on Wednesday.

A standout feature of the case, according to Guardia di Finanza police colonel Francesco Ruis, was the link established between criminal organisations like the ‘Ndrangheta and Chinese companies offering financial services.

The amount of more than 50 million euros in recorded financial movements, according to Ruis, who oversaw the most recent inquiry in Rome, does not accurately reflect the scope of the scandal.

“This is what we have tracked from 2020 to 2022, but investigations cannot trace all operations. It’s like doing a stakeout, you see 20% of what happens”, he said.

In a statement, the Guardia di Finanza police claimed that they had detained 33 persons, including seven Chinese nationals, in Rome and six other Italian cities on suspicion of participating in an organised crime network that trafficked drugs and laundered money.

According to the statement, they also recovered almost 10 million euros in cash from so-called “money mules,” who were in responsible of sending money outside.

Recent investigations have revealed how Italian drug traffickers are increasingly employing unregulated shadow networks of Chinese money brokers to hide cross-border payments.

The transfer method entails depositing money with an Italian money broker while another agent in the network somewhere else in the world makes the payment, which is known as “flying money” or “fei qian” in Chinese.

The latest case’s focal point, money laundering, involved Chinese import-export companies selling apparel and fashion accessories in Rome’s Esquilino neighbourhood.

These served as gathering points for the illegally obtained funds, which were later transported anonymously and untraceably to China.

The buyer purchases the drug shipment and does not physically pass the money to the supplier, who then sells it, using the fie chien method. The money’s last resting place, according to the police, was in China.

“The deals between the two Chinese brokers took place through triangulations and fictitious business transactions in China, while the cash travelled by plane to China using the so-called money mules,” Ruis said.

According to the release, the inquiry was aided by accessing encrypted discussions on a platform that was taken down in 2021 by a Europol Joint inquiry Team.

(With agency inputs)