Hong Kong busts $1.8-bn money laundering syndicate with India links, 7 held

At least seven persons were arrested by Hong Kong customs authorities on Friday in connection with the territory's biggest money-laundering case involving a whopping HKD 14 billion (USD 1.8 billion), some of it linked to a mobile app scam case in India.

The syndicate used “stooge” bank accounts and shell companies to transfer the largest amount linked to a single case recorded in the city, the Customs and Excise Department of Hong Kong said.

The operation was linked to a mobile app scam in India and two jewellery companies in the country, which allegedly handled about HKD2.9 billion (USD 371 million) of the funds, Suzette Ip Tung-ching, the head of customs' financial investigation bureau told the media in Hong Kong.

Ip described the amounts laundered as “astonishing” with one of the accounts receiving as much as HKD100 million (USD 12.8 million) a day and carrying out as many as 50 daily transactions.

Some of those arrested were non-Chinese residents of Hong Kong, she said without giving details.

Law enforcement in Hong Kong, India, and elsewhere cooperated in carrying out the operation, enabling its success, Ip said.

She said, “We found that a large amount of money came from India as well as other overseas bank accounts.”

“The Indian authorities exchanged intelligence with us."

"We found that certain bank transactions were connected to the two companies that have been taken down by the Indian authorities being suspected of laundering crime proceeds in relation to the online mobile application scam”, she said.

Ip said the suspects were accused of laundering the cash through transactions involving gemstones and electronics, with the group, including a 34-year-old man, believed to be the mastermind, the Hong Kong-based South China Morning Post newspaper reported.

His wife, brother and father were also arrested, as well as three other Hong Kong residents accused of setting up a large number of shell companies and stooge bank accounts to trade electronics, gemstones and jewellery.

“These bank accounts were used for receiving multiple local and overseas transactions before conducting complicated and frequent trades with multiple layers of laundering,” Ip said.

According to police, stooge account holders are those who loan or sell their bank accounts to syndicates to collect scammed money and launder crime proceeds in exchange for hundreds or thousands of dollars.

Ip added that authorities had spotted a significant discrepancy between the bank transactions valued at billions involving companies registered under their names, and import and export declarations of about HKD 90 million (USD 11.50).

The Associated Press reported from Hong Kong quoted Yu Yiu-wing, the bureau's divisional commander as saying that officers exchanged intelligence with Indian authorities and found some of the money came from two jewellery companies that Indian authorities said were connected to the scam.

Officials have confiscated electronic devices, documents, and over 8,000 carats of suspected synthetic gemstones apparently meant for export to India.

The previous record money laundering case involved about 6 billion Hong Kong dollars (USD 767 million) and arrests of nine people in January 2023.

China's law enforcement officers have been detaining a large number of Chinese involved in telecom fraud cases and money laundering abroad in recent months.

Chinese public security departments have cracked 391,000 cases of telecom and online fraud from January to November 2023, the country's ministry of public security said last month.

To deliver a heavy blow to relevant criminal activities, the ministry in 2023 launched several law enforcement campaigns targeting telecom and online fraud, state-run Xinhua news agency reported on January 5.

In total, 79,000 suspects were apprehended, including 263 persons who financed, led, or were in charge of such activities.

The ministry has also dispatched work teams to countries including Thailand, the Philippines, and Cambodia to participate in international law enforcement missions.

Multiple overseas criminal dens were destroyed, and more than 3,000 suspects were captured in the process, the report said