Italian police have dismantled an underground bank used by drug traffickers through which several hundred million euros are believed to have moved over at least three years.

The clandestine bank, whose logistical base was located in Prato, north-west of Florence, has been run since 2021 by a Chinese national, officials said.

The operation acted as a “global broker at the service of organised crime, offering secure channels for paying for huge drug consignments without any physical movement of cash and guaranteeing total anonymity of financial flows,” police said on Monday in a statement.

The circuit, which made it possible to “virtually transfer capital between Italy, Spain, France, Germany, Belgium and the Netherlands through a network of intermediaries who retained a commission”, managed to move €80-100m per year for at least three years, police said.

Drug cartels, such as Albanian trafficking organisations active in Italy, and the Italian mafia, were clients, it said.

Under-the-radar money transfers run by the Chinese mafia, known as Fei Chien or “flying money”, are used by Italian criminal organisations for drug-related payments.

The hard-to-trace system allows someone to pay a broker in Italy who has an agent in another part of the world who will pay the same amount to the intended recipient.

Police said they had arrested 41 individuals in Italy and Spain linked to the network, with charges ranging from criminal conspiracy and drug trafficking to money laundering and aiding and abetting illegal immigration.

A branch of the organisation managed a “lucrative illegal immigration network from China,” which flew migrants to Belgrade before transporting them – or forcing them to march to the Hungarian border through mountainous terrain – to the European Union and the final destination of Italy, police said.

Migrants were charged up to €9,500 (£8,200) for the journey to Prato, Turin, or the province of Verona.

The heart of Italy’s textile industry, the small city of Prato is home to one of the largest Chinese communities in Europe – and in recent years a battleground for rival Chinese mafia groups warring to control the market for clothes hangers and freight transport.

The Chinese mafia, which is also engaged in illegal betting dens, prostitution and drugs, helps supply Prato’s textile industry – primarily the fast-fashion sector – with workers of various nationalities.

They are often exploited, paid about €3 an hour and working 13 hours a day, seven days a week, police investigations have shown.