The Xin money laundering syndicate: How a shadow bank washed $10 billion

The Xin Money Laundering Organisation ran one of the largest financial crime operations in Australia, washing an estimated $10 billion in illicit funds.

This syndicate, led by Steven Xin and Zhouhau Ma, profited at least $150 million by facilitating illegal financial transactions on an industrial scale.

Origins

The organisation emerged from the collapse of SunCity, a casino junket business run by tycoon Alvin Chau. After a 60 Minutes expose, SunCity came under intense scrutiny for money laundering links to Chinese Triad.  Xin and Ma transitioned into shadow banking, offering wealthy Chinese nationals a way to move money out of China and into Australia while bypassing capital-flight laws. 

The laundering process

Xin and Ma initially provided legitimate money transfer services, drawing on cash reserves held in multiple countries to facilitate transactions for legitimate clients. However, they soon realised the potential for greater profit by integrating dirty money into their system. Previous ties to drug cartels and criminal syndicates allowed them to quickly scale their dirty money laundering service to an industrial level.. 

So under the veil of legitimacy, and with a 4-10% cut of every dollar moved, they went to business.

• Criminal groups deposited illicit funds into bank accounts controlled by Xin.
• These funds were wired through multiple accounts to obscure their origins.
• Xin provided the cleaned cash to Chinese clients, allowing them to purchase property and luxury goods in Australia.
• To repay the syndicate, the clients would transfer an equivalent amount from their Chinese bank accounts to offshore entities controlled by Xin.
• These offshore entities (ghost accounts or shelf companies) then redirected the funds back to the criminal groups, completing the laundering cycle.
• The syndicate also used casinos, cryptocurrency and daigou businesses to ensure no actual funds crossed international borders, further disguising transactions and helping evade law detection.

The bust

Operation Avarus-Midas

All was going well for Xin and Ma until The Australian Federal Police launched Operation Avarus-Midas after noticing a pattern of suspects carrying large duffel bags, stuffed with cash, during another money laundering bust code named Zanella.

Zanella was delivering low level syndicate members but the seniors were evasive. The investigators devised a long-term plan, code-named Operation Avarus-Midas, to patiently track the money trail with a heavy emphasis on counter surveillance.  

While monitoring phone communication in February 2022, Police came across texts and calls about a mystery company called Tara Global trying to purchase a five-storey building at 119 King Street, adjoining Sydney’s Pitt Street Mall for $21 million. But the company was running into some trouble with the National Australia Bank.

The company was using $7 million sent from two Hong Kong shelf companies as part of the purchase amount. They were also trying to secure a loan for $11 million. The connection was made.

Mum gets involved

The Tara Global account at National Australia Bank had been set up in their Burwood branch by a woman claiming to be a wealthy Chinese investor. She reportedly arrived at the bank in a Lamborghini 4WD.

Police uncovered that this woman who claimed to represent Tara Global was in fact Xin’s mother-in-law and that she was helping Xin and other syndicate members invest their profits in Australian real estate.

The banks file a SAR

The National Australia Bank declined Tara Global’s $11 million loan application as it appeared suspicious. When the declined application came through, Steven Xin, contacted a trusted insider at the bank, Chen Zhang, to ask for advice.

Police recorded messages from Steven to Chen asking what they should do next. Chen advised that they should make a new application with another financier, Latrobe Finance and also advised how they could try and get further loans out of the bank.

Before Tara Global could make a new application, in September 2022, the bank froze all of Tara Global’s Accounts. The Organisation wasn’t fazed by the freezing of their accounts as previously they had just set up new companies, new accounts and new loan applications.

However this time, the police were on their tail. The bank sent an alert to the police around the suspicious activity on the Tara Global account. The police then contacted the bank and worked with a small team of bank investigators who provided the Federal Police with critical data on the operations’ targets. 

What they seized

When officers finally conducted raids in February 2023, they raided 13 locations across Sydney, seizing:

• $29 million in cryptocurrency
• Luxury cars worth $1 million
• Four firearms
• A vast property portfolio comprised of:
  • Sydney mansions
  • A luxury city building
  • Hundred of acres of land near Sydney's second airport.

All individuals involved were charged with serious money laundering and proceeds of crime offences. Australia Federal Police’s Assistant Commissioner Schofield said ‘this was a sophisticated, complex syndicate established to facilitate the movement of funds regardless of their origin, purpose or harm caused to the Australian community.”