Chinese state-linked gangs are laundering hundreds of millions of pounds in cash via international students, a report claims.
They are allegedly taking cash from low-level drug dealers and using money mules to place it into a number of bank accounts.
The report is written by Kathryn Westmore, a senior research fellow at the Royal United Services Institute (RUSI) think tank.
She believes the Chinese state has even been providing ‘tacit support’ for the criminal gangs.
The operation works by exploiting the large number of Chinese students in the UK, many of whom are from extremely wealthy families.
However, China restricts citizens from transferring any more than around £38,000 out of the country each year, for limited purposes like studying or travelling.
The gangs are capitalising on Chinese students’ desire for more spending power by selling them British currency they have collected from various UK criminals.
The students then pay the equivalent amount in Chinese currency to a bank account controlled by the group, paying fees as high as 30 per cent.
Chinese state-linked gangs are laundering hundreds of millions of pounds in cash via international students, a report claims (file pic)
It comes after Qiji Wang (pictured), of Left Bank, Manchester, was jailed last year for coordinating an undergrounding banking operation
Large swathes of cash were found during multiple police searches of his gang’s homes
Cash counting machines were also found at the addresses
Finally, the Chinese group then makes an equivalent value of the cash laundered available to the original British-based criminals.
The high fees for the Chinese students – who are effectively ‘money mules’ – means that this service is often offered for free to criminals in the UK, undercutting other organised money-laundering operations.
A total of almost 150,000 Chinese students were in UK universities in the 2023-24 academic year.
Phil Brickell, a Labour MP who sits on the foreign affairs committee, accused the Chinese authorities of being ‘responsible for fuelling the rise of these professional money launderers here in the UK’.
He told The Times Chinese financiers ‘have honed their skills by plying their illicit trade to students and businesspeople coming to the UK, before going on to offer their expertise to serious crime gangs’.
Ms Westmore said: ‘The limited number of prosecutions in the UK have been of networks moving tens of millions of pounds and individual money mules depositing six-figure sums.
‘However, it is likely that the true scale of Chinese money laundering is much greater than this and is continuing to grow.
‘Based on my research, it is likely that these groups are laundering, at the very least, hundreds of millions of pounds related to organised crime activity in the UK.’
It comes after a number of high-profile money-laundering cases involving Chinese nationals.
Last year, seven Chinese gang members who laundered more than £55 million and arranged shady cash deals around London were jailed.
A three-year investigation by officers in Stoke Newington uncovered a sophisticated international network of money laundering via Chinese underground banking.
The gang’s ringleader, Qiji Wang, 29, used a messaging app to coordinate selling British pounds to Chinese students.
Officers seized a total of almost £500,000 in assets from the group.
A Home Office spokesperson said: ‘Money laundering impacts our communities by drawing people into crime, gangs, and exploitation, and undermines our national security.
‘That’s why we remain firmly committed to working in partnership with law enforcement, regulators, financial institutions, and the voluntary sector to address the harms caused by money mule networks and associated financial exploitation.’
There have been growing fears that the large number of Chinese students at UK universities may also be putting vice chancellors in difficult positions regarding academic freedom.
Last week it was revealed Sheffield Hallam University allegedly complied with a demand from Beijing to halt research about human rights abuses in China, leading to a major project being dropped.
Following threats of legal action, the university U-turned and apologised.
