China and Chinese Mafia overseas protecting each other’s interests: Report

Prato [Italy]: The dangerous rise of Chinese organised crime in Europe highlights its ties to the Chinese state as part of Beijing’s campaign to repress diaspora communities and amass influence, ProPublica reported.

In 2010, a mob of six Chinese mobsters killed two gang rivals on Via Strozzi. The slaughter on Via Strozzi in 2010 was part of a startling escalation of mob violence in Prato, which has one of Europe’s biggest Chinese immigrant communities.

As the investigation culminated in 2017, detectives made another ominous discovery: The kingpins in Italy had high-placed friends in Beijing.

“A guy like Zhang does what the consulate doesn’t do, or does it better,” ProPublica quoted a senior Italian national security official saying.
“If you want in-depth street information, intelligence, you go to a guy like Zhang. He has a network, power, and resources. He knows the diaspora. He is feared and respected,” he added.

According to ProPublica, as the regime of President Xi Jinping expands its international power, it has intensified its alliance with Chinese organized crime overseas. The Italian investigation and other cases in Europe show the underworld’s front-line role in a campaign to infiltrate the West, amass wealth and influence, and control diaspora communities as if they were colonies of Beijing’s police state.

But the rise of Chinese organized crime in Europe has caught authorities largely off-guard. An examination of it offers an unusually vivid look at a covert alliance in action.

The partnership appears to mix geopolitics and corruption for mutual benefit. Gangsters help monitor and intimidate immigrant communities for the regime in Beijing, sometimes as leaders of cultural associations that are key players in China’s political influence operations and long-distance repression, Western security officials say.

The Chinese Communist Party “takes the most powerful, richest, most successful figures overseas and recognizes them as the nobility of the diaspora,” ProPublica quoted Emmanuel Jourda, a French scholar on Chinese organized crime.

“And it doesn’t matter how they made their money. The deal, spoken or not, is: ‘You gather intelligence on the community, we let you do business. Whether legal or illegal”, he added.
In exchange for their services as overseas enforcers and agents of influence, the Chinese state protects the mobsters, ProPublica cited Western national security officials.

And in Europe — as in the United States — national security chiefs say the Chinese government refuses to cooperate with their investigations of Chinese organized crime.
Money is another driving force in the alliance. Diplomatically delicate prosecutions in Italy, Spain and France have resulted in convictions and fines against Chinese state banks that worked with Chinese criminals to launder the proceeds of widespread tax evasion, customs fraud and contraband.

Chinese mafias have also become the preferred money launderers for the Continent’s drug traffickers, whose onslaught poses an unprecedented threat to several governments.

Stretching across Europe, the underground Chinese money networks pump billions of illicit dollars into China’s economy. During one recent year, police at Rome’s Fiumicino Airport arrested 16 couriers carrying a total of more than 41 million USD bound for China, ProPublica reported.

“It is hard to imagine that this activity is not welcomed by the Chinese authorities,” ProPublica quoted the chief prosecutor in Prato, Giuseppe Nicolosi.

“Large amounts of money are returning to China,” he said.
According to the authorities, the implications for the United States are urgent because the same tactics and networks plague Chinese American communities.

US law enforcement has tracked interactions between Chinese government operatives and Chinese American mobsters who harass dissidents, engage in political interference and move offshore funds for the Communist Party elite, ProPublica reported citing US national security officials say.

“Organized crime is doing services for the Chinese government” on both sides of the Atlantic, a veteran US national security official.

“There are deals between organized crime and the Chinese government. The government tasks them to expand their influence and become eyes and ears overseas. Once they get themselves established, there are locals they can corrupt. It’s a classic modus-operandi,” ProPublica quoted the officer.

US national security officials are also concerned because Europe is a vulnerable front in China’s offensive to divide and weaken the West.

“There was a lack of awareness of the danger,” ProPublica quoted the chief anti-mafia prosecutor in Florence, Luca Tescaroli, whose jurisdiction includes Prato.
He has created a unit to fight Chinese mafias. But, he said: “We cannot criminalize the Chinese community. We know they are also victims of intimidation, extortion and violence.”

Prato’s Chinatown starts just outside the stone ramparts, narrow lanes and Romanesque cathedral of the city’s historic centre.
Its immigrant energy extends to the Macrolotto industrial park on the edge of town, where signs on warehouses and workshops mix Chinese words with names like Flora, Kitty and Style. More than 6,000 Chinese-owned businesses give Prato an outsized role in the diaspora.

In 1990, there were 520 residents of Chinese origin, according to an Italian government study. Today, officials say Prato has one of the largest Chinese communities in proportion to the city’s size in Europe: close to 40,000 out of a total population of about 200,000. That includes as many as 10,000 undocumented immigrants. Italy has Europe’s third-largest Chinese population after the United Kingdom and France, ProPublica reported.

Still, life for many Chinese residents feels like a crossfire. Some Italians accuse Chinese merchants of evading taxes, paying low wages and other shady practices. Non-Chinese robbers and thieves prey on them suspecting them of carrying large amounts of cash.
And Chinese immigrants are believed to be the prime victims of the rise of Chinese organized crime in the 2000s, ProPublica reported.

In 2011, witnesses of the double murder on Via Strozzi, told police about Lin Guochun, aka Laolin, the reputed boss of Prato, court documents say.

Surveillance led to another breakthrough even higher in the criminal hierarchy. Police identified the alleged boss of bosses in Rome: Zhang Naizhong.

Zhang teamed with Lin to conquer the market for the distribution of goods among Chinese business enclaves in Europe, court documents say.

Working with police in other countries, Italian detectives charted the kingpins’ alleged war on competing transport companies, court documents say: murders in Italy; shootings and stabbings in Spain, France, Germany and Portugal; a litany of arson attacks, assaults and threats, ProPublica reported.

“China uses a range of proxies and cutouts, and organized crime is one of those proxies,” a US intelligence official said.

“We see a growing brazenness in [Chinese] malign influence operations.”
Sometimes, expatriate gangsters even set themselves up in foreign countries with the blessing and support of corrupt allies in the Communist Party elite back home, ProPublica quoted a veteran US national security official saying.

“The gangsters are told to go establish themselves in a certain country, given different business opportunities,” the veteran US national security official said.
“Transportation help, get consumer goods out of China, and the government helps organized crime there. Chinese corrupt officials can make it easy to move goods out of China,” ProPublica quoted the official.

The Chinese politicians who meet with Chinese gangsters overseas “represent their government as well as their own self-interest,” he said.

Soon, even more evidence would emerge of a brazen alliance between accused expatriate gangsters and the Chinese security forces.

According to ProPublica, the headquarters of the Fujian Overseas Chinese Association in Italy occupies a corner building on Via Orti del Pero in the heart of Prato’s Chinatown. In March of last year, the place made headlines.

Chinese media announced “good news” from Prato: the inauguration of the Fuzhou Police Overseas Service Station in the Fujian association’s headquarters.
Among six community leaders pictured beneath the station’s blue banner was the association’s executive vice president at the time: Zheng Wenhua.

Zheng, also known as Franco, seemed a puzzling choice to open a police station. Four years earlier, Italian authorities had accused him of being a top figure in the Prato underworld.

However, despite all criminal records, Zheng continues to remain a civic leader. He has met with visiting Chinese dignitaries including the mayor of Fuzhou, spoken at community events and attended a gala in February featuring the mayor of Florence and the Chinese consul, according to media reports and photos. In March, he was elected president of the Fujian Association, ProPublica reported.

Meanwhile, Zheng wasn’t the only one with alleged ties to both the underworld and the new Fuzhou police station in Prato. China Truck prosecutors charged another vice president of the association with helping Lin obtain fraudulent immigration papers.

Photos at the Fuzhou police station show three more community leaders whose personal and business links to gangsters surfaced during the investigation, according to court documents and senior law enforcement officials. None of them were charged, though authorities seized five bank accounts belonging to one man.

Despite the celebratory Chinese media reports, the station was part of a global campaign of repression, ProPublica reported citing Western officials and human rights advocates.
Safeguard Defenders, a human rights group, has revealed a network of more than 100 covert stations overseen by Chinese provincial police forces in more than 50 countries.

Based in cultural associations, businesses and homes, the outposts help persecute dissidents and support Operation Fox Hunt, which deploys undercover police and prosecutors illegally across borders to track down people accused of crimes — justifiably and not — and take them back to China, according to Western officials and human rights advocates.

After Safeguard Defenders issued its report last year, at least 12 countries began investigations.

The US reaction was the strongest. Targeting an illegal station in New York, federal prosecutors charged two Chinese American leaders with stalking and harassing dissidents for Chinese authorities including the Fuzhou police — the same force involved in the Prato station. (United Front officials also helped set up the New York station, U.S. authorities say), ProPublica reported.

“It is simply outrageous that China’s Ministry of Public Security thinks it can get away with establishing a secret, illegal police station on U.S. soil to aid its efforts to export repression and subvert our rule of law,” ProPublica quoted the acting head of FBI counterintelligence, Kurt Ronnow.

In response, Chinese Foreign Ministry spokesperson Wang Wenbin accused US authorities of making “groundless accusations.”

“There are simply no so-called ‘overseas police stations,’” Wang said. “China adheres to the principle of non-interference in other countries’ internal affairs, strictly observes international laws and respects the judicial sovereignty of all countries.”

“The suspicion is that the goal of these stations is to enable Chinese authorities to control and monitor the Chinese diaspora community,” ProPublica quoted Tescaroli, the Florence prosecutor.

There are 11 Chinese police outposts in Italy, more than any other country, and three in Prato. They multiplied during past Italian governments, which had notably close relationships with Beijing.

In 2016, Italy began a program that allowed visiting Chinese police officers to conduct joint uniformed patrols with Italian police. The stated goal was to improve the protection of Chinese tourists and immigrants, but the patrol program fomented the spread of the unofficial stations, said Laura Harth, the campaign director of Safeguard Defenders. Photos show Chinese officers at the stations, sometimes joined by Italian police.

“They used the joint patrols to launch pilot stations,” Harth said. “China described it as one of its biggest achievements.”

Across the Mediterranean, Spain is another place where the secret Chinese stations allegedly converge with the criminal underworld.

At least five of those community leaders have records in Spain for crimes including human smuggling, falsification of documents, receiving stolen property, labour law violations and fraud, ProPublica reported citing Catalan police officials.

Across Europe, investigators have discovered that the Chinese underworld makes itself useful to the Chinese state in another, crucially important arena: money.

This illegal machinery has also pumped billions of dollars into the Chinese economy, authorities say. Although China has the most formidable police state in the world, law enforcement chiefs in Europe complain about its steadfast resistance to helping their investigations into organized criminal activity by Chinese migrants.

The Industrial and Commercial Bank of China, a state-owned institution, the biggest bank in the world based on total assets.

In 2011, ICBC opened a branch in Madrid on a thriving downtown boulevard filled with museums, luxury hotels and cafe terraces.

It was later found that the bank executives set up an audacious system in which criminals delivered suitcases and boxes full of euros to the bank day and night, court documents say. The bank sent hundreds of millions to China through illegal mechanisms such as fake identities and fraudulent invoices. Managers advised crime bosses about how to transfer funds to China covertly. The Madrid branch did not issue a single alert about suspicious financial operations to Spanish authorities between 2011 and 2016, court documents say, ProPublica reported.

Italian investigators identified another bank in Hungary, China’s closest ally in Europe, that received more than 1.2 billion USD in clandestine cash deliveries from across the Continent and wired the money to China between 2017 and 2018.

Chinese financial crime networks pose “an elevated threat” in Europe, according to a recent French law enforcement report.

They have become the preferred money launderers of the drug trade and act as brokers for international deals, delivering cash on demand so that cartels don’t have to transport funds across borders, ProPublica reported citing European security officials say.

Five years after Italian police rounded up the accused gangsters in 2018, the continuing saga of the China Truck case illustrates progress and setbacks in the response to a threat that caught Europe largely unawares.

A total of 79 defendants are still awaiting trial in Prato. The proceedings have been slow because of the sheer scope of the case, the labyrinthine justice system and the laborious demands of translation.

It is also Italy’s first prosecution of a Chinese organization for mafia-level conspiracy, which is a complex offence to prove. Appellate panels have questioned the evidence for the mafia-related charges, releasing defendants from pre-trial custody.

Last September, a court convicted some defendants for individual offences and acquitted others such as Zhang, the alleged boss in Rome. In the case of Zheng, the community leader involved in the Prato station, the statute of limitations ran out on some charges against him. Lin is no longer facing trial because his whereabouts are unknown. But Zhang, Zheng and the others still face trial on the mafia conspiracy charges, ProPublica reported.

Although it has been an uphill battle, authorities say they have disrupted the underworld.
As per ProPublica, the new Italian government of Prime Minister Giorgia Meloni has taken a tough line on the issue.

Intelligence and law enforcement agencies have created units focused on Chinese organized crime and malign influence. A parliamentary anti-mafia commission will examine alleged wrongdoing in Prato’s Chinese manufacturing sector and illicit money flows to China. Public attention has led to the shuttering of the Fuzhou station in Prato.

As for the double homicide on Via Strozzi, the case opened a door into a secret world. Prosecutors charged 20 people in the murder and related crimes, winning convictions in the latter cases. But the accused killers remain out of reach, authorities say, in China, ProPublica reported.