Hong Kong Cracks Down on Largest Money Laundering Case, USD 1.8 billion Linked to India

Hong Kong customs authorities have arrested seven individuals in connection with the territory's largest-ever money laundering case, involving a staggering HKD 14 billion (USD 1.8 billion). Shockingly, some of the laundered funds were linked to a mobile app scam in India.

The Customs and Excise Department of Hong Kong stated that the syndicate utilized "stooge" bank accounts and shell companies to facilitate the transfer of the largest sum associated with a single case ever recorded in the city.

According to Suzette Ip Tung-ching, head of the customs' financial investigation bureau, the operation had connections to a mobile app scam in India and involved two jewelry companies in the country. These companies allegedly managed approximately HKD 2.9 billion (USD 371 million) of the funds involved in the scheme.

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.

Ip noted, We discovered a significant influx of funds originating from India, as well as from various overseas bank accounts. She further added, The Indian authorities collaborated with us by sharing intelligence. Through this cooperation, we identified specific bank transactions associated with the two companies that have been targeted by Indian authorities for suspected involvement in laundering proceeds from online mobile application scams

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.

According to the police, stooge account holders are individuals who lend or sell their bank accounts to syndicates, enabling them to collect money obtained through scams and launder illicit proceeds, often in exchange for substantial sums ranging from hundreds to thousands of dollars.

Ip further highlighted that authorities identified a significant inconsistency between the value of bank transactions, reaching billions, involving companies registered under their names, and import-export declarations totaling about HKD 90 million (USD 11.50).

Yu Yiu-wing, the bureau's divisional commander, as reported by The Associated Press from Hong Kong, stated that officers collaborated with Indian authorities, exchanging intelligence. They discovered that some of the money originated from two jewelry companies identified by Indian authorities as linked to the scam.