Financial corps crack down on money laundering. On Wednesday, the Guardia di Finanza arrested 33 individuals across seven provinces for the alleged crime of criminal association aimed at drug trafficking and money laundering, as well as extortion, self-laundering and illegal possession of weapons.
- The investigations confirm the penetration of Chinese crime into Italian society, including evasion, money laundering and drug trafficking.
Uncovering the system. The GdF investigations, coordinated by Rome’s Anti-Mafia Directorate and carried out by a range of units focussing on organised crime, financial fraud and drug trafficking operations, identified a group of Chinese citizens who systematically carried out money laundering of illicit profits deriving from several criminal groups involved in drug trafficking, including at the international level.
- The machine comprised two main sections, with the first – the money laundering division – operating under the supervision of one Wen Kui Zheng.
- On the other side were what the GdF called two “high-level” criminal groups, one headed by Antonio Gala and Fabrizio Capogna, the other by Federico Latini.
Rome’s “washing machines”. The alleged money laundering activities took place in business premises dealing with the import-export of clothing and fashion accessories, all run by two Chinese family communities in Rome. Except the businesses existed only formally, as a front, and acted as “collection centres” for money of illicit origin destined to be transferred abroad – mainly to China – in an anonymous and untraceable manner.
- The Chinese groups guaranteed the kind of punctuality, discretion and security required for this illegal financial intermediation, based on the so-called fei qian method (literally “flying money”) consisting of the virtual transfer of money abroad.
- The cash deposited with the Chinese broker did not physically leave the country of departure, but its nominal value was transferred to the counterparty/broker in the foreign country.
- The subsequent clearing would take place in different ways, including using currency couriers, “direct” transfers of fractional amounts to circumvent anti-money laundering constraints, or money transfers disguised as fictitious business transactions.
Recovering the loot. The GdF seized €10 million, 8 of which at the Fiumicino airport near Rome, from the “money mules” in charge of physically transferring the cash out of the EU. They also ascertained that over €4 million were transferred to the Rome-based Chinese group. Overall, the GdF traced financial movements for more than €50 million flowing from Italy to China.
- As explained in a note, the investigations revealed the “considerable potential” of these organisations. They relied on cutting-edge communication methods aimed at evading interception; cars equipped with sophisticated secret compartments to transport drugs, weapons and money; and dedicated, guarded and difficult-to-penetrate locations for storing and processing the drugs before their introduction into the clandestine sales network.
It’s diffused. As Il Giorno reported, the GdF investigations also dismantled a network of ghost companies created by Chinese citizens – and headed by an Italian accountant – who issued false invoices on behalf of roughly 300 companies across Italy and sent millions abroad, mainly China. The authorities arrested five people on charges of money laundering and seized over €85 million.
The intelligence community was on it. Traces of these criminal activities can also be found in the Italian Intelligence Division’s Report on Information Policy for Security, published in February 2022, where analysts remarked on the “business-criminal dynamism of unscrupulous Chinese entrepreneurs” who leveraged “articulated tax evasion and money laundering schemes” – while often systematically collecting and transferring the proceeds of illegal activities in China.
- By “exploiting their advantage opportunities offered by the market and national systemic vulnerabilities”, such actors have “succeeded in consolidating their position within certain national economic sectors, including through a systematic collocation in well-defined territorial areas.”
The government is, too. Back in April, the Meloni government requested the anti-mafia commission to investigate “Chinese infiltration into Italian society” for the first time, given the growing amount of evidence (it was our Italian sister website that called on the anti-mafia commission to investigate the matter).
- Decode39 has reported on what the GdF calls the “China underground bank.” In March, they arrested two Chinese citizens in connection to hidden money transfers. The suspects shielded the operation with fronts such as electronics shops.
