March 16, 2023
The Guardia di Finanza arrested two and is investigating thirteen over the operation, which allegedly offered hidden money transfer services to China. That’s another “underground bank” discovered by Italian authorities in a matter of days
It’s another Chinese “underground bank.” Italian financial authorities have reportedly found an illegal operation, geared at covertly moving money to China from a front – an electronics shop – in Florence and a branch in Prato, against payment of 2.5% of the amount transferred.
After carrying out the investigation, the Guardia di Finanza arrested two persons of Chinese origin for criminal conspiracy dedicated to the illegitimate exercise of financial and banking activities.
A total of 13 people, all Chinese, are under investigation for membership of a criminal association, illegitimate exercise of financial and banking activities, and fraudulent evasion of tax payments.
These orders were issued by the judge for preliminary investigations at the Court of Florence, who also seized over one million euros – plus €74,000 in commissions relative to roughly €3 million in operations.
The details. This specialised service uncovered by the GdF consisted in receiving customers, namely Chinese entrepreneurs operating in the leather and clothing sector, and withdrawing the cash to be transferred – without being traced – through intermediaries authorised by the Bank of Italy.
Smaller amounts were handled through WeChat and AliPay, China-based apps that allow for money transfers via credit cards.
Larger amounts were advanced through current accounts and bank cards opened in China (in favour of other persons in China, indicated by the customers themselves). Then the cash collected in the Italian branches was withdrawn by other compatriots (“transferors”) and physically transported to the motherland by other means.
In some cases, it was the “transferors” who provided their own money supplies in the East at the request of the investigated gang in return for a further commission. In some cases, the clandestine bank would make cash available to its clients after receiving a transfer to current accounts in China.
The luxury cover. The investigations also revealed that in order to create an adequate supply to allow the money withdrawn in cash to reach the final clients, the suspects would sometimes buy luxury goods in Italy upon the direction of fellow Chinese nationals residing in the motherland. The latters would then receive them and pay the relevant sum, plus commissions for the service, to the suspects’ foreign accounts, so that the cash withdrawn in Italy would not need to be transferred to the country of origin.
The investigation also revealed the obstacles created by China’s pandemic restrictions, such as the cancellation of flights. Shoppers noted it was harder to get the cash in the country, so they opted to transport it by container or even car to deposit it at foreign banks where anti-money laundering legislation was less stringent.
A growing trend. Recently, La Repubblica reported on another China-linked illegitimate operation, which the GdF dubbed “China underground bank” – a shadow credit institution operating through branches in Rome, Florence, Padua, Prato, Naples and Reggio Calabria.