Crypto-Linked Money-Laundering Scheme Worth $230M Uncovered In Hong Kong

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Based on a South China Morning Post article, three people have been arrested by Hong Kong customs officials for their involvement in a large-scale HK$1.8 billion ($228 million) money-laundering scheme. This operation utilized a cryptocurrency platform and bank accounts connected to shell companies.

Authorities made arrests after examining questionable financial dealings marked by unusually high and frequent transfers in accounts without tax documents or proof of imports/exports and residences.

Suspects Allegedly Used Tether

While conducting an investigation, we found that one account received large daily deposits amounting to approximately HK$39 million or $4.9 million, and was involved in a total of 167 transactions.

Upon closer inspection, it was found that two suspected individuals managed approximately HK$760 million, which represented forty percent of the overall funds, using the cryptocurrency platform Tether.

Florence Yeung Yee-tak, head of the Financial Investigations Unit at the Customs Department, mentioned the difficulties in probing money laundering connected to cryptocurrencies because of their anonymous nature and the absence of geographical boundaries.

Yee-tak highlighted the importance of using intelligence, analyzing financial transactions, and conducting financial probes to collect evidence for the enforcement team.

Customs officials simultaneously raided four homes, five corporations, and two authorized money transfer businesses, leading to the apprehensions.

Trio Arrested For Laundering Billions In Crypto

A group of three individuals – a 42-year-old woman and two men aged 48 and 60 – are accused of establishing five businesses and creating 18 personal bank accounts with local banks from the summer of 2021 to the following July.

According to reports, these businesses allegedly participated in more than a thousand questionable financial exchanges, obtaining money from hidden origins.

Significantly, the three individuals taken into custody had no prior relationship with one another. An unemployed woman, who is accused, reportedly took on a pivotal part in the money laundering scheme. She supposedly received funds from numerous businesses and cryptocurrency platforms.

Money was moved to other businesses or the two male suspects using legally authorized money transfer services.

Based on Customs and Excise Department reports, a woman is suspected to have overseen HK$900 million worth of illicit funds, while a 60-year-old driver managed approximately HK$300 million, and an self-employed man handled around HK$600 million in these transactions.

According to recent investigations, it has been uncovered that the funds came from a cryptocurrency exchange platform and approximately 200 local and international businesses. Once these funds reached the accounts of the shell companies, they were swiftly moved on to other entities.

These companies, supposedly involved in the production of mobile phone accessories, large machinery sales, and vehicle parts, were found to conduct business deals unconnected to those industries. Their involvement in agriculture and food production suggests that they functioned more as facades or “shell” companies.

During the “Racer” operation, we confiscated mobile phones, business papers, stamps, and financial records. Customs authorities are currently looking into the origin and destination of the money involved.

Customs authorities have caught the main suspects in the syndicate but they haven’t dismissed the idea of making more arrests.

The three individuals were taken into custody for allegedly planning to handle ill-gotten gains, which is referred to as money laundering. They’ve been granted bail but stand the possibility of serving up to 14 years in prison and paying a fine of HK$5 million if found guilty.

Crypto-Linked Money-Laundering Scheme Worth $230M Uncovered In Hong Kong

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2024-04-19 10:28