From Israel to Colombia, who's laundering money in China

Staff Writer
Columbus CEO

SHANGHAI (AP) — China is emerging as a global hub for money laundering, not just for Chinese but for criminals around the world, The Associated Press has found. There are a number of options in China for cleaning dirty money, including through major state-run banks, import-export schemes, and informal money transfer systems that date back a millennium, according to recent police investigations and lawsuits in Europe and the United States.

Here's who law enforcement officials in the U.S. and Europe believe is laundering money in China:

—The FBI says sophisticated cyber-scammers tricked thousands of Western companies out of $1.8 billion in just over two years by impersonating top corporate executives in a scam known as the fake president, fake CEO or business email compromise scam. The bureau says it has received 13,500 complaints from victim companies so far, with the number rising dramatically in 2015. The known culprits are not Chinese, but the top destinations for the stolen funds are bank accounts in China and Hong Kong, according to the FBI.

—Israeli criminal networks are working with Chinese immigrants across Europe to launder money using a variation of a Chinese informal value transfer system called fei qian, or "flying money," according to Western intelligence documents reviewed by the AP. The immigrants give their cash to a trusted member of the local Chinese community in France, Italy, Spain, Belgium or Germany. That Chinese intermediary — the bagman — gives the Israeli fraudsters bank account numbers in China where they can direct their stolen money. Once the Chinese confirm that the money has landed in the correct account, the bagman gives the Israeli partners in crime the cash.

—In February, Spain arrested six executives from China's largest bank, the Industrial and Commercial Bank of China, accusing them of facilitating a Chinese money-laundering network that sold its services to Spanish and Chinese criminal syndicates in Europe, according to Europol, which also is investigating the network's links to France, Germany and Lithuania. Chinese authorities have said the state-run bank will cooperate with the investigation and that they have no reason to believe the bank was breaking the law.

—Three Colombians based in Guangzhou, China, laundered over $5 billion for drug cartels based in Mexico and Colombia using bank accounts in Hong Kong and mainland China, according to an indictment unsealed by the U.S. Justice Department in September. The funds, often withdrawn in cash, were used to purchase counterfeit goods in China, which were then shipped to Colombia and other export markets for resale.

—In June, France's financial crimes squad, reportedly accompanied by money-sniffing dogs, raided a Chinese wholesale district in Aubervilliers, just north of Paris, where Chinese merchants are accused of laundering money for North African drug dealers.