Police 'found illegal immigrants'

All three men - including Nual Miah (pictured) - deny the charges

A court has heard how police uncovered an alleged people smuggling operation at an Aberystwyth restaurant.

A jury at Swansea Crown Court was told on Wednesday how officers raided the Dragon Palace Chinese restaurant in October 2002.

There, it is alleged, they discovered illegal immigrants, fake documents and blank birth certificates.

Restaurant owner Long Chen, 36, and his nephew Xing Cheng, 21, and Indian restaurant owner Nual Miah, deny conspiracy to assist illegal entry into the UK and three charges of money laundering.

It is alleged the trio were laundering money for Chinese criminal gang, the Snakeheads.

This is an insight into the mechanics of money laundering Leighton Davies QC, prosecuting

The jury heard that police allegedly found four illegal Chinese immigrants in an upstairs room at the restaurant in the mid Wales town's Portland Street.

At the same time, police made co-ordinated raids at addresses across Britain where they recovered other illegal immigrants and identity documents, the jury was told.

Leighton Davies QC, prosecuting, said that audit trails showed Mr Cheng transferred money from 26 accounts he set up in Britain to contacts in mainland China and Hong Kong.

According to Mr Davies, the contact then distributed the cash to banks and companies around the globe.

'Criminal money'

He said it was a "far cry" from Mr Cheng's claim that he was merely operating a free service for Chinese immigrants who wanted money sent back to their families.

Mr Davies said: "The money was not sent to Cheng's family it was transferred to banks all over the world.

"It's another classic sign of money laundering, the diverting of funds.

"They were diverting funds in an effort to clean up, that is to say, launder criminal money.

"Dyfed-Powys Police began investigating but because of constraints of manpower and expenditure had to limit their efforts on just two dispersals of money by the contact in Hong Kong.

"This is an insight for you into the mechanics of money laundering.

"In December 2001 the Hong Kong contact paid $6,500 US dollars to a fish processing company in Denmark.

"The money led to a quantity of fish then being transported to a seafood company in Shanghai, one of the biggest cities in China."

Mr Davies said another example of what he claimed was money-diversion involved 40,000 Euros (30,000) being paid to an Italian company to provide an industrial fish processing unit for a firm based in a Chinese city.

'Confuse investigations'

Mr Davies said it could well have been the case that a proportion of some of the huge sums of money being transferred by Cheng did represent payments by Chinese immigrants to their families.

Mr Davies added: "What you must bear in mind is another classic feature of money laundering schemes in order to thwart and confuse investigations is that monies from innocent sources will be mixed up and cloaked over the criminal money.

"It's a feature of money laundering schemes that they are painted up to look lawful.

"We don't have to prove every single penny was placed at the disposal of the Snakeheads. It's enough that some of the money was placed at their disposal."

Mr Davies added that a key prosecution witness would be Dyfed-Powys Police case analyst Mervyn Ray, a qualified accountant.

'Third party'

He examined Mr Cheng's account books found in the police raid on the Dragon Palace.

He said in one six-month period more than £2m was credited and from Mr Cheng's accounts and more than £2m was debited.

Mr Davies added: "Mr Ray says Cheng did not appear to have any formal accountancy training but he was nevertheless conducting a large and complex money-moving operation."

He said the accounts even had meticulous entries for Mr Cheng's own expenses such as buying cigarettes or car repairs.

He said it indicated Mr Cheng was accountable to a third party.

The case continues.