The Liu Syndicate: Melbourne’s $63 million money laundering empire

"I can convert $1 million cash into Bitcoin just like that without alerting any of the authorities." So starts the story of Melbourne's $63 million heist.

The story was originally brought to the press upon the arrest of three men who allegedly funnelled $63 million dollars through dormant Australian bank accounts.

These Individuals can now be named as Boliang Liu, Tao Zhou and Wei Wang. This team, referred to by police and media as the Liu Syndicate had built a smooth money laundering system that they thought could not be identified by police as they flew under the radar by staying below the regulatory threshold.

What were they doing?

Boliang Liu and Wei Wang operated two seperate money remittance businesses where customers gave them cash which they deposited into bank accounts of the customer's choice.

Money Remittance Businesses are often used as a front for money laundering operations. There is a high chance of fraud in these businesses if there are no proper checks done on the origins of the cash that customers are handing over over to the business.

The money laundering cycle run out of these business was simple.

• Customers brought their cash into the businesses and gave Boliang Liu and Wei Wang the bank account they wanted the money to end up in.
• That cash was then handed over to Tao Zhou who was the ‘money runner’. He would pick the cash up from these businesses and the spend the day travelling to different ATMs through Melbourne to deposit the cash. He was pretty smart with how he deposited the cash. He would only deposit $10,000 at a time to avoid flagging the banks' alert systems.
• This money was deposited into bank accounts that had been set up using stolen identities purchased from the dark web to create fraudulent accounts. These stolen identities were mostly taken from foreign students who had studied in Australia and then returned to China. A number of these stolen identities had bank accounts that came with them, they were ‘dormant’ as they hadn’t been used since the students left the country.
• The money was then transferred through multiple bank and crypto currency accounts to clean it before being returned to the customers chosen bank account.

Wei Wang was the crypto currency mastermind in the syndicate, responsible for the set up and management of these crypto accounts. He knew exactly what needed to be done to avoid detection by authorities in the cyrpto currency sector.

A smooth operation

All in all it was a pretty smooth running operation, because they were operating below banking thresholds, there were no regulations in place to catch them.

A common refrain from Tranche 2 entities is that if banks are doing AML, then why do they need to do it as well. Situations like this are a great example as to why you can’t always rely on a bank’s system to check all money coming into accounts is legitimate. The $10,000 bank threshold is widely known by criminals and easily exploitable.

These three men made a lot of money off of this system and they spent their money building a luxury life for themselves, buying luxury brand clothing, jewellery and expensive cars and property.

Ultimately with the current AML legislation in Australia they were easily able to avoid flagging their syndicate with the Authorities.

The bust - Operation Taipan

So how did it all come to end, well that’s very much a story of hubris. The group was discovered by police one fateful night, when Boliang Liu spoke with an undercover officer at a party.

"He very proudly boasted that he could convert $1 million cash into Bitcoin just like that without alerting any of the authorities."

Of course the undercover officer reported this conversation to his Superiors which led to the establishment of Operation Taipan.

Operation Taipan was led by Victoria Police, who worked in collaboration with AUSTRAC and the Australian Criminal Intelligence Commission. The taskforce began investigating the syndicate and very quickly found damning evidence of the Syndicate's business.

One of the key pieces of evidence that the police uncovered was CCTV footage of Tao Zhou, depositing cash from a back pack into ATMs in Melbourne’s eastern suburbs. He was captured spending more than an hour at these ATMs, feeding the cash into the machine, ensuring each transaction was under that $10,000 limit.

This evidence along with information that was collected on the business accounts of the Money Remittance Businesses and all of its illegal activities led to the Police setting up a major raid.

Raids were conducted at six locations across Melbourne, including homes and storage facilities. The authorities' findings were significant. They sized over $2 million in cash, illicit tobacco and luxury vehicles. Among those arrested were Boliang Liu, Tao Zhou and Wei Wang who faced serious charges including money laundering, structuring and state proceeds of crime offences.

The methodology behind their operation was intricate. Identity theft, elusive behaviours and knowledge of the restrictions of the current financial system were all central to their scheme.

This case really highlights the deep-rooted connections between money laundering and broader criminal networks, including drug trafficking and arms smuggling. The role of financial intelligence agencies, like AUSTRAC, has proven crucial in tracking and dismantling such sophisticated operations.