Hong Kong customs arrests 3 over alleged HK$1.8 billion money-laundering scheme linked to cryptocurrency platform, shell companies

Hong Kong customs arrests 3 over alleged HK$1.8 billion money-laundering scheme linked to cryptocurrency platform, shell companies

Hong Kong customs officers have arrested three people in connection with a HK$1.8 billion money-laundering racket involving a cryptocurrency platform and bank accounts of shell companies.

The bank accounts had “abnormally frequent and large transactions” despite the companies not having tax records, import and export declarations, or physical addresses, customs said on Thursday.

One account received as much as HK$39 million a day and handled up to 167 transactions.

Hong Kong customs arrests 7 over HK$14 billion money-laundering operation

Two of the suspects allegedly handled HK$760 million – or 40 per cent of the funds involved in the case – from a cryptocurrency platform. Police said the cryptocurrency was Tether.

“Investigating money laundering involving cryptocurrency presented us with challenges as it possesses a high degree of anonymity and it is not restricted by jurisdictions,” Florence Yeung Yee-tak, commander of customs’ financial investigation division, said on Thursday.

“We acted on intelligence, and conducted capital flow analysis and financial investigations.”

Officers mounted an operation on Wednesday targeting four flats, five companies and two licensed money service operators before making the arrests.

The three locals arrested – a woman, 42, and two men, aged 48 and 60 – allegedly set up five companies and 18 local bank accounts between June 2021 and July 2022 that handled more than 1,000 suspicious transactions involving funds from unknown sources.

Customs said the three suspects did not know each other.

Hong Kong student jailed for money laundering in connection with 2019 protests

The woman, who was unemployed, allegedly played an upstream role in the money-laundering process, accepting transfers from different companies and cryptocurrency exchange platforms.

These funds were then transferred to other companies or the two men involved through the two licensed money changers.

The woman handled HK$900 million of the funds, the Customs and Excise Department said.

It said the two male suspects were lower down in the process, with the 60-year-old, a driver, dealing with HK$300 million. The other man, who was self-employed, handled HK$600 million.

Hong Kong, Indian customs arrest 8 in HK$500 million money-laundering case

Customs said investigations revealed the sources of the funds included a cryptocurrency exchange platform and more than 200 local and overseas companies. The funds were swiftly transferred to other firms after they arrived in the shell companies’ bank accounts.

The shell companies were reported to be in different industries including mobile phone accessories, machinery wholesales, and vehicle parts. But they had business transactions in unrelated sectors such as agricultural products and food, with these firms also believed to be shell companies.

According to customs, the three arrested were suspected to be the core members of the syndicate, and the operation had dismantled the ring.

Hong Kong plans to regulate cryptocurrency exchanges amid money-laundering alert

Mobile phones, company documents and stamps, and transaction records were also seized in the operation, code-named “Racer”. Customs said the source and direction of the funds were still being investigated.

Customs did not rule out further arrests.

The trio were arrested for suspected conspiracy to deal with property known or reasonably believed to represent proceeds of an indictable offence, commonly known as money laundering. They were later released on bail.

Those convicted of the offence face a maximum penalty of 14 years’ imprisonment and a HK$5 million fine.



Read More

Leave a Reply