Part 1: When
Chinese residents of Spain needed to get piles of illicit cash back home,
police allege, they found an accomplice in the Industrial and Commercial Bank
of China. Confidential court filings, including wiretap transcripts, detail how
the bank allegedly helped launder hundreds of millions of euros.
MADRID – A
few minutes before 8 p.m. on Aug. 8, 2012, two Chinese living in Spain - a
banker and her client - held a blunt phone conversation.
Wang Jing
was a senior officer at the Madrid branch of the state-controlled Industrial
and Commercial Bank of China. The client, Xu Kai, was an alleged top figure in
an international money laundering group that was suspected of using the bank to
transfer illegal income to China. The network was allegedly using multiple
accounts in the name of Chinese residents of Spain, in some cases without their
permission, to make the transfers. But there had been a hitch.
Earlier that
day, banker Wang said, a woman had come to the branch to complain that
transfers were being made from her account without her knowledge. Wang chided
Xu, telling her to make sure that account holders used in the scheme were on
board.
“You have to
look out for yourself and make sure these people are obedient,” Wang warned.
More complaints would lead to “problems” for the bank, Wang added.
In fact, the
bank already had problems. Big problems. Spanish police were listening.
Wang’s
warning to Xu is documented in confidential court filings that include wiretap
transcripts from a series of police investigations starting in 2009 into
Chinese organized crime in Spain. The Spanish authorities have said publicly
they suspect these groups siphoned up to 1.2 billion euros ($1.4 billion) out
of Spain to China between 2009 and the end of 2012.
The wiretaps
and findings from police investigations ultimately led Spanish investigators to
the front door of the Industrial and Commercial Bank of China, or ICBC - the
world’s biggest bank by assets. On the morning of Feb. 17 last year, dozens of
police officers burst into the bank’s Madrid branch and arrested Wang Jing and
four other senior managers. Two more executives were arrested after the raid.
In a
statement released in May last year, Spanish prosecutors said the giant Chinese
state-run lender was a conduit for laundering tens of millions of euros in
illegal funds from tax fraud and smuggling by “Chinese criminal organizations.”
The sums laundered were so large, the prosecutors said, that “the damage to the
socio-economic order and the national economy is clear.”
But beyond
news of the arrests and a summary of allegations in the statement, little
information has been revealed about the case.
Now,
thousands of pages of confidential case submissions reviewed by Reuters, and
interviews with investigators and former ICBC employees, provide the first
detailed account of the alleged racket and show that the probe reaches high
into the state-run bank’s European operation. The investigation has so alarmed
Beijing that China’s top official in Madrid has publicly pressured Spanish
officials to conclude the inquiry, warning that failure to do so would harm
economic relations.
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