Master con man tells how foreign criminals launder illicit fortunes through China

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 mainland China and Hong Kong 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 intelligence documents.

Gilbert Chikli, a convicted French-Israeli con man, understands China’s allure. He 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, US$1.8 billion in just over two years, according to the FBI.

“China has become a universal passageway for all these scams,” said Chikli. “Because China today is a world power, because it doesn’t care about neighbouring countries, and because, overall, China is flipping off other countries in a big way.”

China’s foreign ministry, central bank and police all declined repeated requests for comment.