Italy Charges Bank Of China In Massive $5 Billion Money Laundering Scheme


Italy Charges Bank Of China In Massive $5 Billion Money Laundering Scheme

China's government and businesses aren't know for their ethical conduct and the world continues to take notice of this backward behavior, the most recent example being Italian prosecutors, who announced on Friday that are seeking to indict 297 people and the Bank of China itself for their role in a massive money laundering scheme uncovered earlier this month.

The accused are mostly Chinese migrants residing in Italy though they also include four senior managers of the Chinese state bank's branch in Milan. Italian prosecutors have found that suspects even used Mafia-like techniques, including intimidation, Italy's ANSA news agency reported Saturday.

The case shines a spotlight on the large underground Chinese economy in Europe and the inability to government and law enforcement officials to regulate the close-knit communities as well as the economic ties, both legal and illegal, that connect China with the West.

Prosecutors discovered that more than $5.1 billion in ill-gotten profits from counterfeiting, prostitution, labor exploitation and tax evasion rackets that were sent to China in less than four years using the money-transfer service that funneled the funds through the Bank of China.

China's state banked earned over $1 million in commissions, according to Italian investigative documents. The money had been parceled into small amounts to avoid detection and the bank's management and audit staff didn't report suspicious transactions and instead helped conceal the source and destination of the funds.

China, which is currently looking for Western help in hunting its own economic criminals, refused to cooperate with the investigation, Italian officials said.

Once the money left Italy, it vanished, preventing Italian police from continuing their investigation in China, but the news reporters were able to track some of the missing funds to a large state import-export company that has previously been accused of repeatedly shipping counterfeit goods, including to the United States.

China's government, via its state-run Global Times newspaper, defended the Bank of China and criticized the AP's report as "strange." The article quoted a 'law expert' saying that the Bank of China has "no obligation to cooperate with Italian police."

While issuing the denial and not cooperating, the Chinese are increasingly pressuring Western governments to help hunt corrupt officials who have fled overseas.

Italy and China did sign a memorandum of judicial cooperation last September but so far, like so many Chinese deals, the collaboration has been decidedly in Beijing's favor.

Italy extradited a Chinese national in February accused of stealing more than $225,515 during her employment at a securities company in Heibei province. According to China's Ministry of Public Security tt was the first time anyone had been extradited from Europe for an alleged economic crime.

In Italy, institutions as well as individuals can be ordered to stand trial and it appears likely the latest case will see both individuals and the Bank of China itself charged.

The case has been ongoing for years, involving operations carried out between 2007 and 2010.

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