Chinese art dealer arrested on money laundering charges

MADRID (AFP) – At 45, sharp-suited Chinese art dealer and businessman Gao Ping has climbed high in life, even being photographed with Spain’s King Juan Carlos and China’s President Hu Jintao. Now he is in a cell in Madrid, waiting to go before a judge, accused of heading a gang that laundered millions of euros, officials and media reports said – though his defenders said he was an easy target.

A police official told AFP Friday that Gao was among more than 80 people arrested this week in “Operation Emperor” and that he was suspected of being the leader of the network busted in the series of raids.

He was expected to go before the judge on Saturday, a judicial source added, after 19 suspects who were due to be questioned on Friday – mostly Chinese suspected of laundering money.

The judge will rule on possible bail and whether to keep Gao in detention.

Spanish television broadcast pictures of Gao, dressed in a brown leather jacket, covering his face as police detained him and searched his Gao Magee Gallery in an arty area of downtown Madrid.

Police vans surrounded his white-pillared mansion in the posh western Madrid suburb of Somosaguas.

“People who know him tell me they are very surprised,” said Jorge Garcia, a Madrid-based consultant who chairs a Spanish-Chinese chamber of commerce and works with investors in both countries.

“He is a businessman who started from the bottom, with a small shop, and his business grew. He was a philanthropist who helped a lot of people in need and was the face of Spanish art in China in recent years,” he added.

“He seems to have been a humble and much-loved person.”

Over 500 police took part in “Operation Emperor.” They seized 10 million euros ($13 million) in cash in raids across the country as well as some 200 vehicles, guns, jewels and works of art.

Top anti-corruption prosecutor Antonio Salinas said the network laundered between 200,000 and 300,000 euros a year, dodging taxes, bribing officials and forging documents.

He said the racket was made up of traders who sold contraband goods in Spain, laundered the money and transferred it to China.

The National Court, which ran a two-year investigation, said the gang also channeled money from rackets involving prostitution and extortion to tax havens with the help of Spanish and Israeli intermediaries.

Spanish newspapers cited unnamed sources saying his vast network used hit men and thugs to intimidate late-payers, though police and prosecutors refused to comment on these details pending the hearings.

El Mundo newspaper cited National Court documents, which have not been publicly released, saying the gang used a unit called the Shandgon Group “which worked on collecting payments using violence when necessary.”

Defenders of Gao Ping say Spain’s big Chinese community, which owns many wholesale distributors and bargain-basement shops in major cities, is an easy target at a time when Spaniards are angry with the government in a bitter recession.

In its efforts to fix its public finances, the Spanish government has announced measures to recover tax revenues which included an amnesty for some back taxes owed on big fortunes.

The government said the money-laundering harmed the Spanish economy.

“The government doesn’t want to touch the big tax evaders, because they are friends of the state – bankers, politicians, businessmen,” Garcia said.

“Blaming the Chinese mafia for the fact there are five million unemployed in Spain is a bit ridiculous.”

In two of Gao’s businesses, the Gao Magee Gallery and the Gold City handbag wholesale warehouse in Madrid, telephone calls went unanswered..