February 19, 2024
HONG KONG – Hong Kong customs officials have arrested seven people suspected of being involved in a syndicate that allegedly laundered HK$14 billion ($1.8 billion) using shell companies and “stooge” bank accounts, in the largest-ever money laundering case in the financial hub.
Codenamed “Daybreak”, the operation was linked to a mobile app scam in India and two jewelry companies, the Customs and Excise Department revealed at a press conference on Friday.
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The seven arrestees — four Chinese and three non-ethnic Chinese persons — are aged between 23 and 74. They were part of a large-scale transnational syndicate that used various shell companies and bank accounts to transfer large sums to Hong Kong from overseas in the guise of running international trading businesses, according to officials.
On a pretense of exporting jewelry and diamonds to India, the money laundering syndicate turned the fraudulent proceeds into payments of goods so as to transfer the illicit gains from India to local corporate bank accounts under its control.
Customs and Excise Department, Hong Kong
They were released on bail pending further investigation. Officials have not ruled out further arrests.
About HK$165 million in assets under the names of the arrested individuals have been frozen during the operation.
Acting on a tip-off, customs officers identified a suspected money laundering syndicate that was family owned.
“It not only opened multiple companies and bank accounts in Hong Kong but also recruited local persons through an intermediary to open shell companies and stooge accounts for dealing with a total of about HK$14 billion of suspected crime proceeds,” Hong Kong Customs said in a statement.
The investigators found that some of the tainted money originated from the proceeds of mobile application scams in India.
“On a pretense of exporting jewelry and diamonds to India, the money laundering syndicate turned the fraudulent proceeds into payments of goods so as to transfer the illicit gains from India to local corporate bank accounts under its control,” officials said.
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After in-depth investigations, officers raided 11 premises across Hong Kong on Jan 30 and arrested seven suspects.
“They were believed to be the mastermind, core and grassroots members of the syndicate, and the intermediary who recruited the stooge account holders,” the Customs statement read.
Simultaneously, officers raided a money laundering operation center at a commercial premises.
They seized a large quantity of suspected synthetic gemstones, mobile phones, computers, company chops, checkbooks, bank cards, bank documents, and trading documents inside the arrestees’ residential and commercial premises.
An investigation is ongoing.
Under the Organized and Serious Crimes Ordinance, the maximum penalty is a fine of HK$5 million and imprisonment for 14 years, while the crime proceeds are also subject to confiscation.
Contact the writer at shamim@chinadailyhk.com