‘China new haven for money launderers’

Scam artists, drug cartels and gangs from around the world have found a new haven for laundering money: China. The country’s well-developed underground financial networks have caught the attention of foreign criminals who are using China to clean their dirty money and pump it back into the global financial system — largely beyond the reach of Western law enforcement, an Associated Press investigation has found.

As China globalised, sending people and money abroad, so too did its criminal economy. Gangs from Israel and Spain, cannabis dealers from North Africa and cartels from Mexico and Colombia have laundered billions in China and Hong Kong, slipping their ill- gotten gains into the great tides of legitimate trade and finance that wash through the region, according to police officials, European and US court records and documents reviewed by the AP.

Gilbert Chikli, a convicted French-Israeli con man, is widely credited with devising a scam so successful that it has inspired a generation of copycats. Called the fake CEO, fake president or business email compromise scam, the fraud has cost thousands of companies, many of them American, $1.8 billion in just over two years, according to the FBI.

China’s central bank and police refused repeated requests for comments. Chinese foreign ministry spokesman Hong Lei said “is not, has not been, nor will be in the future a centre of global money laundering”.