Chinese authorities believe the money was raised by defrauding investors in China.

In 2016, the Chinese Ministry of Public Security asked the AFP to try and identify the individuals involved in the money laundering scheme.

In Melbourne, raids were carried out in Lower Plenty, Hawthorn and the CBD.

Simultaneous raids were executed in Waterloo and Zetland in Sydney, and on the Gold Coast.

It's the third separate investigation since October involving Chinese nationals allegedly creating shell companies, laundering money and evading tax, resulting in $10.5 million in restrained assets.

Last month, the AFP restrained three residential properties and two bank accounts relating to proceeds of crime with an estimated value of $2 million.

Investigations into the individuals involved are ongoing.

“As people attempt to evade foreign governments and police agencies, the AFP is committed to working with our international counterparts to stop the proceeds of crime being laundered in Australia,” said Commander Bruce Hill the AFP's acting national manager for organised crime, .

“This kind of activity – where significant criminal proceeds are moved into Australian assets – can erode the level playing field for Australian homebuyers and small business owners.

"This ripple effect impacts our whole community; it is far from a victimless crime."