By Nick McKenzie and Amelia Ballinger
Kevin Zheng outside the 39 Tope brothel.Credit:
At 10 am on a warm Melbourne morning, a hulking man who has been firmly on the radar of Australian human trafficking authorities for 15 years fiddles with a set of keys at the entrance to an inner-city brothel.
A few seconds later, Kevin “Fatty” Zheng opens the door to 39 Tope and steps outside for a cigarette.
Zheng is a convicted criminal who has been repeatedly implicated in alleged sex trafficking in court cases across the country. Under state brothel licensing laws, which have strict probity requirements, Zheng should have no role at an Australian brothel.
His presence at 39 during last summer marked the beginning of a busy few months for the brothel.
In May, detectives from the Australian Federal Police’s human trafficking team raided 39. The raid was sparked by a Japanese woman’s allegations that she was being forced to endure conditions at 39 that police then suspected might have breached Australia’s human trafficking laws.
But no charges were laid as a result of the raid. For 39, it was a mere inconvenience.
Two days later, an undercover operative visited the brothel reception and was told that not only was it open for business, but the relaxation of border controls post-COVID meant there was about to be a boom in a certain type of sex worker: Asian students.
In August, 39 again attracted the attention of regulators. The NSW casino inquiry into Star Entertainment’s dealings with suspected organised criminals detailed in its final report how 39’s official licensee and owner, Simon Pan, had also been linked to alleged sex trafficking.
Despite his alleged criminal links and the risk he may be dealing in dirty money, Pan’s “lifetime turnover” for The Star casino in Sydney was approximately $49.5 million, the Bell Inquiry found.
In Queensland, where Pan had also sought to set up a brothel, he’d gambled about $3 million.
In October, 39 was back in the frame. Victorian Attorney-General Jaclyn Symes and Police Commissioner Shane Patton intervened in a tribunal application, lodged by this masthead in an attempt to uncover more about 39’s links to organised crime.
Pan had been trying to transfer his government permit to run 39 to a relative, a move police were fighting by alleging this relative was also tied to Chinese organised crime.
Police were successful in suppressing their secret report into 39, arguing that disclosure of the report might prejudice ongoing investigations or police methodology.
But the mere fact of their secret report, along with the AFP raid, the findings at the Bell Inquiry and the sighting of Zheng at the brothel, present 39 as a powerful case study of how the hidden, but apparently thriving, underground sex trade industry works in Australia.
So, too, have the revelations this week as part of Trafficked, a project led by The Age, Sydney Morning Herald, 60 Minutes and Stan’s Revealed documentary program. Trafficked has also exposed the wholesale exploitation of Australia’s border security and immigration system by criminal syndicates linked to human trafficking, worker exploitation, money laundering and other crimes.
Despite the work of investigators across state and federal agencies, the infrastructure of organised crime that enables trafficking and exploitation appears entrenched in Australia.
Those enabling the problem include migration agents licensed by the federal government, as well unlicensed visa fixers, education agents and private colleges. Federal government-registered money movers are also complicit.
Among those paying the biggest cost are foreign women who, even if they wish to work in the sex industry, answer to organised criminals who think nothing of exploiting them.
“It’s not a small problem. They’re certainly generating significant funds out of exploiting these people. You’re talking hundreds of millions of dollars that are leaving Australia untaxed to go back to organised crime, internationally,” Detective Inspector Brad Phelps, a senior Queensland Police organised crime fighter, told Trafficked this week.
Detective Inspector Brad Phelps at Queensland Police headquarters.Credit:Glenn Hunt
Abul Rizvi, a former deputy secretary of the Immigration Department under the Howard government, says the organised crime rorting of the immigration system is not only enabling criminals to enter Australia and run illegal ventures, but is leaving genuine visa applicants, including asylum seekers, in limbo because there’s a backlog caused by the need to process shonky claims.
He says this week’s revelations point to an immigration system in disarray after years of government neglect.
“The only explanation I can give is a lack of resources and a level of negligence,” he said.
Kevin Zheng is a veteran of Australia’s underground sex trade. In 2004 in Queensland he was convicted of illegal provision of prostitution. In 2006, he was charged in South Australia with inflicting sexual servitude and aggravated robbery with a weapon, although this case was later dropped. Later, he pleaded guilty to keeping an illegal brothel in Adelaide.
In 2008, the federal police discovered him working in Melbourne at a brothel where two Korean women were removed due to sexual servitude allegations. He was not charged in connection with this discovery.
In 2009, Zheng was named in an AFP document on transnational sexual servitude, which linked him to yet another brothel that was investigated after seven women were brought in from China, some on false passports.
I felt like I was dying. I felt that I had fallen into hell. I closed my eyes very tightly, and, with my hands, I created very tight fists.
A year later, the federal police interviewed two alleged victims of a trafficking ring who, in documents later tendered in court, identified Zheng as an enforcer for a human trafficking ring. Despite those allegations, Zheng has not been charged with trafficking offences. The Trafficked investigation was unable to contact Zheng for comment.
One victim, Rose, arrived in Australia from China in 2009 after paying $8000 for travel and tuition fees. She was picked up at Melbourne Airport and taken to a two-bedroom CBD apartment that hosted five other Chinese women. Zheng was waiting.
“Kevin was responsible for making sure I couldn’t be away from the apartment alone,” Rose told police. According to her statement, a senior female crime syndicate member told her she would have to pay off a $20,000 debt.
“It was at this stage that she first told me I would be required to work as a sex worker. I went blank in my mind. I was really shocked, and I didn’t know what to do. I decided to try and leave the flat right then.
“I moved toward the front door and Kevin physically stopped me from leaving by using his body and arms to stand in front of me. I was very fearful.”
Rose told police on her first night working at a Melbourne brothel, she was forced to have sex with six men.
“I felt like I was dying. I felt that I had fallen into hell. I closed my eyes very tightly, and, with my hands, I created very tight fists. I just lay very still, staring at the ceiling with a blank brain. I felt so devastated that I really had no wish to live on.”
In 2011, The Age and the Sydney Morning Herald first identified Zheng as a suspected senior figure in a human trafficking ring in a story about his involvement in the violent death of 30-year-old Melbourne man.
Abraham Papo was killed after an altercation with Zheng outside a brothel where Papo’s South Korean girlfriend worked. Before the confrontation, Papo told his family that his girlfriend had been trafficked and he needed to save her.
Zheng was arrested in 2009 over the alleged murder of Abraham Papo but was acquitted.Credit:Craig Abraham
“He was silenced because he knew what was going on,” Abraham’s mother, Deanna, told this masthead in 2011. After the story revealed state police failures in the investigation into Papo’s death, a new investigation was ordered by the coroner.
Zheng was charged in February 2013 with Papo’s murder, and found not guilty later that year.
But the syndicate he was working for faced its own prosecution.
Throughout 2013, two AFP senior investigators, Detective Inspector James Cheshire and Superintendent Danielle Woodward, ran an intensive surveillance operation, codenamed Katrino, targeting licensed Melbourne brothels they suspected were hubs for human trafficking.
They included the Candy Club, a brothel in Richmond, and 39 Tope.
During Katrino, Zheng again emerged as a person of interest in a syndicate led by a human trafficker called Mae Ja Kim.
Organised crime boss Mae Ja Kim was jailed in 2015 in Victoria for a minimum of two-and-a-half years in connection to dealing with the proceeds of crime.
Woodward said the syndicate led by Kim was running 100 Asian women at any one time. These women were from South and North Korea and China, and worked under the shadow of fear, coercion and debt bondage.
“If they didn’t face it directly, Mae Ja would threaten the families. So, she would just say that, ‘If you don’t do what we want, we’re going to go and threaten your family’,” Woodward said.
Operation Katrino is one of the AFP’s most successful human trafficking operations, and yet it didn’t utilise Australia’s human trafficking laws. This was partly because the victims of the syndicate were too fearful to testify.
It’s also why the head of the AFP’s human trafficking division, Jayne Crossley, this week said the law could be “improved”.
AFP Commander Danielle Woodward.Credit:Glenn Hunt
Cheshire and Woodward identified other areas of the criminal code they could use to more easily hold Kim to account.
In 2015, Kim, along with several other syndicate members, were jailed for proceeds of crime offences arising from their exploitation of women at the Candy Club and 39, along with two other brothels. But Zheng again was not charged.
“He’s certainly been someone who’s been working in brothels around Melbourne and certainly connected to a number of different entities that were involved in the Mae Ja Kim syndicate,” Cheshire told Trafficked.
“He’s certainly someone who will assist in the direction of whatever syndicate’s happening to try and exploit the sex workers within those industries.”
As with any sprawling organised crime investigation, the operation also uncovered a range of facilitators the syndicate relied on who were never charged.
Cheshire says licensed and unlicensed migration agents played “a key role in the ability for workers to come from Korea into Australia”.
“During Katrino, most of the workers were being charged $2500 for that initial visa. The migration agent will have all the right answers as far as immigration [officers] are concerned for those visa applications.
“So they know how to get those visas through to allow someone to come out on a working holiday visa or a student visa, and with no intention of doing any studying on a student visa. The only intent is to have them with what is, on its face, a valid visa, to work within the brothels.”
Asked why corrupt migration agents, including those with federal government licences, were operating with relative impunity, Cheshire says it’s a “very difficult” area for authorities to tackle.
This week, Trafficked revealed an unlicensed migration and education agent who had enabled the Kim syndicate arrange hundreds of visas is still operating in Sydney and Melbourne. There is no suggestion the agent was directly involved in or aware of the exploitation of vulnerable Asian women as sex workers.
This agent was covertly recorded claiming that multiple Australian education colleges were operating with a single purpose: to help foreign workers get student visas via fraudulent means.
The agent also claimed the demand for Asian women in Australia’s sex industry is “booming” and that he was still in contact with Mae Ja Kim, who left prison in 2016.
In response to the investigation, the federal government flagged it would look into what it described as “repulsive and egregious abuses”.
The federal opposition has focussed its attention in the immigration debate this week on the return of Australian citizens from Syria.
“The job of the government is to make sure that Australians are safe … not introduce into the system an element of risk, and they’ve done exactly that,” Mr Dutton said on Friday about the government’s decision to allow the return of a number of women and children.
Official sources from various law enforcement agencies, who spoke to Trafficked on the condition of anonymity, said they believed that players in the Mae Ja Kim syndicate were again making use of immigration fixers and money launderers to exploit foreign women.
That belief appears, at least partly, validated by the AFP team’s decision in May to again raid 39.
Over the past year, Trafficked has spent days covertly watching the movement of Asian women to and from 39.
It was this surveillance that captured Zheng appearing to work at the brothel, in clear breach of the brothel’s licence.
The surveillance also observed an activity well known to Cheshire and Woodward. Asian females were shuttled by a male driver between 39 and the other brothel that featured heavily in Operation Katrino, the Candy Club.
Asked if she believed Kim had revived her operation since leaving jail, Woodward says she is realist.
“Mae Ja Kim’s model was a very, very good business model,” says Woodward. “She had supply and demand. It was basic economics.
“And like most organised crime, when there’s a need for something like that, if it’s not Mae Ja Kim running it, it’s probably someone else doing it.”
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