A $228 million Chinese money laundering syndicate was allegedly linked to a romance investment scam run by an organised crime network, a court has been told.
One of the accused ringleaders was released on bail on Thursday, despite fears he will flee overseas and allegations he spoke to a co-accused about getting their "stories straight" before being arrested.
Federal police said Zuo Chen, who owns a $10 million home in Melbourne's east, previously held a $100,000 line of credit with a private jet company based at Essendon Airport.
The 37-year-old, along with three co-accused, successfully applied for bail in Melbourne Magistrates Court, after being accused of operating Changjiang Currency Exchange, with others, to launder millions over the past three years.
The company, which operates 12 retail shopfronts across Australia, is accused of being used as a front to transfer money to illegitimate customers and conceal about $228 million from regulators.
While 98 per cent of Changjiang Currency Exchange transactions were legitimate, two per cent were allegedly money laundering for criminal organisations, the court was told.
The syndicate allegedly funnelled money into bank accounts set up in the names of relatives and associates, the court was told, with seven people arrested last week over their alleged involvement.
Police claim Chen, an Australian citizen born in China, received 30 per cent of profits made by the exchange and fabricated how much he was receiving to the Australian Taxation Office.
AFP Detective Senior Constable Thomas Martin said Chen and the syndicate allegedly disguised the source of money, property and other assets, which he said were proceeds of organised crime.
He said police intercepted thousands of hours of phone calls between members of the ring, including Chen.
On one such call, he claimed Chen told an associate about their alleged profits from a "pig butchering" romance scam, which they were contracted to by a Chinese criminal network.
"We f***ing accepted about $100 million right?" Chen said on the call, Det Sen Const Martin told the court.
Pig butchering lures victims using online dating and other platforms, gains their trust as a romantic partner or friend and then takes their money by offering investment opportunities.
He said Chen and a co-accused discussed the AFP's investigation over a phone call, where one of the two said: "We can meet up again to get our stories straight."
Chen is alleged to have flown to Singapore in August when he met with a co-accused, opened a bank account and spoke to an accountant and a solicitor.
Det Sen Const Martin alleged Chen also had business operations in Vietnam, Cambodia and Malaysia, where he wanted to set up a small team as he said his business "operates in the grey area".
Police are transcribing thousands of hours of intercepted phone calls, which need to be translated from Mandarin into English, and tracing the syndicate's many accounts and assets.
Prosecutor John Saunders objected to Chen's bail due to his risk of interfering with witnesses and evidence, and feared he may try to flee overseas as he previously had access to a private jet.
But Chen's barrister Dermot Dann KC said the company, Jetpro, had since stated they would not accept Chen's business while he is on bail.
Mr Dann said Chen would plead not guilty and it would take a long time for the case goes to trial.
Chen's mother offered her home, worth more than $1 million, as a surety against his bail and he offered to wear an electronic monitoring bracelet.
Magistrate Malcolm Thomas granted Chen bail on the condition he not leave his home, surrender his passport, and give police his bank details, mobile phone and IP address within 24 hours of his release.
Chen's family and friends in the court clapped as the hearing concluded.
Three co-accused women, Chen's wife Jie Lu, Jin Wang and Jing Zhu, were also bailed, another three remain behind bars.
The matter will return to court in March 2024.
