The Australian Securities and Investments Commission (ASIC) gained the winding up orders against Prospero in the federal court on Thursday.

“ASIC has received enquiries from clients who are concerned about the return of their funds,” it said in a statement explaining why it had sought to have the company wound up.

Prospero operated a foreign exchange broking and trading business in Australia and offered investors access to high-risk financial trading products.

It came to the attention of the corporate regulator after more than 240 Federal Police raided premises across Australia in October last year.

The AFP revealed seven members of an alleged Chinese organised crime syndicate were accused of secretly running a prominent, multibillion-dollar money remitting chain in Australia.

These members were charged under the most complex AFP-led money-laundering investigation in the nation’s history, it noted.

The Changjiang Currency Exchange, which the AFP alleged is being secretly run by the Long River money laundering syndicate, is accused of laundering almost $229 million in the proceeds of crime in the past three years.

ASIC commenced its investigation into Prospero following the AFP’s investigation dubbed Operation Avarus-Nightwolf.

The 14 month investigation by the AFP resulted in former employees of Prospero being charged with money-laundering offences in October 2023 relating to the Changjiang Currency Exchange money remitting chain, ASIC said.

The current director of Prospero is not charged or accused of any wrongdoing.

The corporate regulator did not identify the alleged Changjiang money launderers with roles at Prospero.

The company’s Australian Financial Services Licence was suspended in December 2023, after Prospero failed to lodge its 2023 audited financial accounts, and it remains suspended.

“ASIC understands that Prospero holds substantial client funds and is concerned to see these returned to clients as a priority,” it said back in March.

“ASIC considers that the best way to secure the efficient return of funds to clients is the appointment of liquidators.”

Restructuring and insolvency group BRI Ferrier were appointed as liquidators of Prospero Markets by orders of the Federal Court of Victoria following the ASIC application.

“The liquidators are undertaking urgent enquiries into Prospero’s financial affairs, including securing the assets and records, with a view to discharging claims from clients, creditors and other parties,” BRI Ferrier said in a statement.

“The liquidators will issue reports to the respective stakeholder groups once the position becomes clear. While the Liquidators intend to distribute funds as soon as possible, it is too early to advise when a distribution can be paid.

“The liquidators are aware of reports linking Prospero to Changjiang Currency Exchange and related prosecutions in 2023 and note that the involvement of regulatory bodies and authorities could affect the conduct of the liquidation.”

The Changjiang Currency Exchange had 12 modern-looking shop fronts in every mainland state in Australia and supplied resources to customers about the country’s anti-money laundering laws.

However, the AFP have alleged this was the company’s attempt to look and act like a law-abiding remittance company.

The AFP have alleged it identified links between known money laundering organisations and the Changjiang Currency Exchange, which came to the attention of investigators when the company opened new and updated existing shopfronts in Sydney during Covid-19 lockdowns.

The Changjiang Currency Exchange has transferred in excess of $10 billion in the past three financial years, according to the AFP.

While most of these funds were from customers engaged in lawful actions, the AFP have alleged the company facilitated a system for organised criminals to secretly transfer unlawfully-obtained money in and out of Australia.

Some of alleged money laundered by the syndicate was from the proceeds of crime, including from cyber-enabled scams, the trafficking of illicit goods and violent crimes, the AFP alleged. The syndicate allegedly would coach its criminal customers how to create fake business paperwork, like false invoices and bank statements, the AFP claimed.

It is also alleged this enabled criminal customers and the Changjiang Currency Exchange to show authorities that unlawfully-gained money was from lawful sources in the event the transfers came to the attention of authorities.

The AFP has accused the Changjiang Currency Exchange of transferring unlawfully-obtained funds to national and international accounts by claiming it was the legitimate business profits and business expenses of their customers.

The alleged co-mingling of legal and illicit funds enabled the company to transfer up to $100 million a day for customers in Australia and throughout the world, with the volume of transfers masking the alleged laundering of tainted funds.

AFP Eastern Command Assistant Commissioner Stephen Dametto said it would be alleged the highly-organised syndicate purchased false passports for $200,000 each, which could have enabled members to flee the country in the event law enforcement agencies became suspicious.

“The AFP will allege the Changjiang Currency Exchange was able to hide its illegal behaviour because it looked like a legitimate and lawful money remitter,’’ Assistant Commissioner Dametto said in October.

“The reason why this investigation was so unique and complex was that this alleged syndicate was operating in plain sight with shiny shopfronts across the country – it was not operating in the shadows like other money laundering organisations.”

Assistant Commissioner Dametto added one aspect of the investigation was linked to Covid-19 lockdowns in Sydney.

“During Covid-19, AFP members were still coming into work, and while most of Sydney was a ghost town, alarm bells went off among our money laundering investigators when they noticed Changjiang Currency Exchange opened and updated new and existing shopfronts in the heart of Sydney,” he said.

“It was just a gut feeling – it didn’t feel right. Many international students and tourists had returned home, and there was no apparent business case for Changjiang Currency Exchange to expand.”

The AFP also alleged that syndicate members were able to amass a significant amount of illegal wealth from their criminal activity.

“We allege they lived the high life by eating at Australia’s most extravagant restaurants, drinking wine and sake valued in the tens of thousands of dollars, travelling on private jets, driving vehicles purchased for $400,000 and living in expensive homes, with one valued at more than $10 million,” Assistant Commissioner Dametto said.

sarah.sharples@news.com.au