Formula to move proceeds offshore

BABY formula stripped from supermarket shelves is being sent to China by moneylaunderers in scams to move profits from crime offshore.

News Corp can reveal money-laundering syndicates are moving millions of dollars overseas by hiring shoppers to buy up baby formula and other sought-after items and ship them to China for resale.

The Australian Federal Police believes the moneylaunderers have hijacked some of the hundreds of “daigous’’ — or surrogate shopper businesses that operate legally — and are co-mingling the proceeds of crime with the cash needed to buy goods and send them to China for resale.

Federal agent Dean Chidgey said police were targeting these organised and sophisticated operations.

“Money laundering is ... a key enabler of organised crime and drug trafficking,” Mr Chidgey said.

“But also in its own right, money-laundering organisations generate profits from money-laundering activities by moving proceeds of crime offshore on behalf of transnational serious organised crime groups.’’

The AFP arrested nine people in two money-laundering investigations across Melbourne in 2018 and 2019.

In July last year, three people were charged after police seized $1.8m in cash from a suburban home. In 2018, six people were charged with a range of offences including money-laundering and tobacco smuggling.

Mr Chidgey said most Chinese tourists, students and residents in Australia, employed as personal shoppers, would not realise they were helping global money-launderers move money from the sale of drugs in Australia offshore.

“Australian baby formula is highly valued in China. It has provided money launderers with another avenue to use dirty money to buy soughtafter products which can be purchased in Australia and sold overseas, effectively transferring the value of the illicit funds offshore without detection from law enforcement agencies,” he said.