China has recruited the services of former police detectives in Australia and other Western countries to help it recover millions of dollars in alleged "hot money" taken out of the country.

Key points: Former police detectives have been hired to recover alleged dirty money taken out of China

Former police detectives have been hired to recover alleged dirty money taken out of China The private operatives say they suspect some dirty money is being laundered through Gold Coast properties

The private operatives say they suspect some dirty money is being laundered through Gold Coast properties The use of private operatives comes on top of China's official efforts to recover billions in alleged hot money

Four Corners has spoken to several former law enforcement operatives who have been engaged through a third-party company in Hong Kong as part of an operation code-named "Project Dragon".

Their mission is to recover proceeds of crime from China that have been transferred out of the country, or legitimate funds that have allegedly been illegally siphoned out to places such as Canada, the United States and Australia.

Four Corners has also seen correspondence showing that under the arrangements, any illicit funds or assets recovered overseas are to be returned to China and the foreign investigators or operatives paid a commission.

Project Dragon

On the Gold Coast, two former police officers have been engaged by a company based in Hong Kong to recover properties, sell them and return the proceeds to China as part of Project Dragon.

Austin Whittaker is an ex-NSW Police investigator, intelligence analyst and Australian Army commando.

His colleague Jason McFetridge is a former New Zealand detective who is now a registered private investigator on the Gold Coast.

Austin Whittaker is an ex-NSW police inspector and former Army commando. ( ABC News: Wayne Harley )

They say their strategy is simple: They attempt to meet with the property owners, explain they are working for the Chinese authorities and see if they are willing to hand over ownership.

"We can sell it, recuperate the losses and return the money back to China. Everyone's happy," Mr McFetridge said.

They say they've identified $80 million worth of property on the Gold Coast that they suspect has been bought with laundered cash by Chinese nationals.

"There's what we're referring to as a cluster of properties at Sovereign Island. Most of them, or all of them waterfront, luxuriously appointed, all vacant," Mr Whittaker said.

Chinese recruits?

The two former police detectives told Four Corners that they knew the law and always operated within it.

"We've had legal advice along the whole way," Mr McFetridge said.

"Before I do anything, we get legal advice to make sure we're within the boundaries of the law, and make sure that it's thorough, what we're doing."

Gold Coast PI Jason McFetridge is a former NZ detective. ( ABC News: Wayne Harley )

But they struck serious trouble in their first case, when the Chinese owners of a property took Mr McFetridge to the Supreme Court after he tried to sell up the property and return the money to China.

They accused him of misleading and deceptive conduct as well as using fraud and forgery to get control of their company, which owned the property.

Mr McFetridge denied the allegations.

But the court ruled the Chinese owners had always been directors of the company and it restrained Mr McFetridge from selling the asset.

Despite the legal defeat, Mr McFetridge and Mr Whittaker say they have been instructed to keep pursuing the case.

Former Scotland Yard investigator Neil Jeans, who now runs a firm that advises big corporates on compliance with anti-money laundering laws, says it is unprecedented for Chinese authorities to use private consultants like Mr Whittaker and Mr McFetridge to recover funds or assets.

"I think they have to tread carefully. One of the challenges they've got is that they need to walk a very, very narrow line," he said.

Both men insist they are not taking their orders from a foreign state.

"We're not working directly for the Chinese Government," Mr Whittaker said.

"In this case the Chinese Government has entered a public-private partnership with a Chinese company to which they are close, who has the mandate to recover money that's been shifted out of China.

"They're simply engaging with [a third party company] in Hong Kong to provide some expertise, some investigative resources to help them do that.

"Again, as I said, the agenda simply is to help stop the cash flow washing out of their economy."

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The gun for hire

Former undercover Royal Canadian Mounted Police officer Bill Majcher is also involved in Project Dragon.

A specialist in financial crime, Mr Majcher is the president of the Hong Kong-based asset recovery firm EMIDR.

"As long as the claim is valid and as long as we're doing everything lawfully and properly, I'm a hired gun to help either large corporates or governments to get back what is rightfully theirs," he said.

Bill Majcher, the president of the Hong Kong-based asset recovery firm EMIDR. ( Four Corners )

But Mr Majcher is cautious when describing his role in helping China's Ministry of Public Security.

"I have a commercial relationship with entities that are in themselves associated in some form or another with policing authorities in China. And a big part of their mandate is focused on economic crime, financial crime, money laundering," he said.

"We know how to operate more clearly I think than a country like China or personnel from China in our own jurisdictions. We have a familiarity."

Operation Sky Net

The use of private operatives comes on top of China's official efforts to recover billions in alleged hot money.

In 2015, China launched Operation Sky Net, a global mission tasked with recovering funds and arresting international fugitives, including corrupt officials.

"What we've seen with Sky Net is a far more systemic and structured and targeted approach, but with a far wider net," Mr Jeans said.

Mr Jeans says Australia is a key target of Sky Net.

"It's been well understood for a number of years that Australia has been a target location for hot money, particularly coming out of China," he said.

He believes that China is using means other than Sky Net to retrieve money here.

"I think there are activities going on, they are covert," he said.

"They are all about applying pressure to people, particularly people that have families back in the country."

Mr Majcher predicts business will boom for his company and for other private operatives involved in asset recovery for China.

"I see us in a growth industry. I see there being a need to hire other former law enforcement from various backgrounds of law enforcement in Australia, to assist us," he said.

"The problem isn't going away and the magnitude of the need is not diminishing. If anything, it's expanding."

Watch Mark Willacy's investigation, Project Dragon, on iview.