Sydney money laundering syndicate bust linked to illegal tobacco trade worth $150 million uncovered by AFP, ABF NSW Police
Updated ,first published
Four men were arrested and charged with alleged links to a sophisticated money laundering syndicate that police say laundered more than $150 million linked to the lucrative illegal tobacco trade with the help of foreign university students.
Investigators from the Australian Federal Police, NSW Police, Australian Border Force and financial crimes watchdog Australian Transaction Reports and Analysis Center raided more than a dozen homes and storage units across Sydney on Monday, seizing 10 tonnes of illicit tobacco, more than $200,000 in cash and a currency counting machine.
Police will allege the organization is linked to the illegal import and distribution of tobacco and launders the ill-gotten gains of several organized crime groups. The AFP and NSW Police jointly launched Operation Avarus-Mustang in May this year, targeting the syndicate and alleged money laundering groups.
AFP Detective Superintendent Peter Fogarty said the organization was believed to have been operating for at least two years and was “crime-free”, allegedly laundering money for criminal groups profiting from the drug trade and committing acts of violence and theft.
On Monday morning, Haihao He, who police allege was a senior member of the organization, was arrested at a home in Dundas Valley and charged with three counts of handling proceeds of crime valued at more than $1 million. Police will allege the 38-year-old laundered $23 million in alleged proceeds of crime on behalf of the union through bank accounts linked to fraudulent dealings.
Allegedly senior members of the union hired people known as “straw directors” to register businesses and open accounts; police alleged that union members then took control of these accounts and transferred large amounts of cash to them.
The cash was allegedly moved through a series of accounts used to launder the funds, transferred to overseas accounts and then routed back to local bank accounts linked to foreign companies to appear as legitimate business payments. He is accused of managing several “straw managers” hired by the union. He was denied bail by police to appear in court on Tuesday.
Police allege financial records of union-affiliated businesses show little or no legitimate business expenses, including rent, insurance or tax payments. Several bank accounts linked to the syndicate have been frozen and will likely be held as proceeds of crime. Fogarty said the union paid college students, including foreign nationals, to serve as company executives.
One of He’s syndicate members, accused of laundering more than $7.8 million in alleged proceeds of crime, was arrested on November 14 and charged with dealing in proceeds of crime valued at more than $1 million.
The 29-year-old man was also charged with a number of firearms offenses after a gun was allegedly found along with 15 bullets, four mobile phones, bank cards and documents at a house in Merrylands. He was refused bail at Parramatta Local Court and was remanded in custody to appear at the same court again on January 23.
Two other union members were charged with a string of offenses following raids on properties in Burwood, Auburn and Wentworth on Monday.
Xudong Yao, 26, was arrested in Burwood and charged with dealing with the proceeds of crime and failing to comply with a digital evidence order after police seized $108,000 in cash, more than a million illicit cigarettes, two kilos of loose leaf tobacco, a Rolex watch and electronic devices. Yao was refused bail by police to appear at Burwood Local Court on Tuesday.
That same day, police stopped a truck in Chester Hill that was allegedly carrying nearly a million contraband cigarettes. Police said the street value of the seized cigarettes was more than $2.1 million. Police believe the cigarettes were destined for tobacconists selling illegal products across Sydney.
Truck driver Wucheng Su, 32, was charged with possessing more than 50 times the commercial amount of illegal tobacco and dealing with proceeds of crime. He was refused bail by police to appear at Bankstown Local Court on Tuesday.
NSW Police organized crime squad commander Peter False said the law, introduced this year, allowed detectives to “target organized crime syndicates who think they can use illicit tobacco to generate criminal proceeds”.
“It became an opportunity for the tobacco underworld to make money,” said False.
Under the new laws, a person found guilty of selling illegal tobacco faces a maximum penalty of seven years in prison or a fine of up to $1.54 million.
“This should be a clear message to those involved in the illegal tobacco industry that there can and will be consequences,” False said.
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