Things are seldom what they seem. Every day somewhere in Madrid a woman would go into a bank, accompanied by different people. Like a good Samaritan, she would act as an interpreter, assisting the people with opening bank accounts.
But, in fact, those people did not really want to open bank accounts, and she had no real desire to help them. She was in fact a controller and the people she ‘assisted’ were victims of trafficking in human beings (THB), forced to work in inhumane conditions in clothing factories run by a Chinese organised crime group (OCG). They were forced to open up bank accounts in their names to be used by the criminal group. This way, a vast network of accounts was created and, via smurfing techniques15, large amounts of cash were placed and layered within the Spanish financial system.
When these activities raised some suspicions, the Spanish Financial Investigation Unit became involved. Preliminary checks were performed, the main group of ‘smurfs’ identified and it became clear that the total value of remittances was impossible to derive from labour-related activities. Spanish Guardia Civil was informed and a reverse financial investigation was immediately initiated to understand the origin of these substantial amounts of money. Soon enough, a large Chinese OCG based in Spain and operating in several EU countries was identified. It turned out to be a subsidiary of an even larger criminal network based in China. Europol was called in to assist.
The illicit profits were derived from importing counterfeit goods, excise tax fraud, exploiting Chinese workers in clothing factories on the outskirts of Madrid, and from the resulting sales of products without paying taxes due Several money laundering typologies were uncovered (smurfing, cash couriers and fei ch’ien - also known as the Chinese hawala). A total of EUR 300 million was estimated to have been laundered and sent to China.
On 11 May 2015 this investigation, known as Operation Snake, concluded with a total of 32 suspects arrested, EUR 1 million in cash and 26 high-value vehicles seized, and 28 high-value real-estate assets frozen. This became one of the heaviest blows against Chinese organised crime activities in Europe. The Guardia Civil investigators followed the money trail further and found connections to other Chinese and Spanish criminal organisations. On 17 February 2016 Operation Shadow was launched, and resulted in the arrest of six top bank managers in Madrid. Europol supported this investigation by providing ongoing analytical support for over a year and by being present on the spot during operations Snake and Shadow.
