4 arrested in HK$1.5 billion Hong Kong money-laundering case involving crypto

Inspector Poon Yip-kan of customs’ financial investigation bureau said a preliminary investigation revealed that part of the funds was linked to criminal activities overseas.

“The syndicate used traditional bank transfers as well as cryptocurrency transactions to wash the dirty cash,” Poon said.

He said the investigations revealed HK$1.5 billion was transferred into the bank accounts of the shell companies from overseas in more than 2,000 transactions between August 2020 and August 2022.

He said most of the transactions involved large sums of money, with the largest single transaction of HK$23 million.

Poon added that the illegal funds were quickly laundered through these bank accounts and divided into small amounts in each transaction before being funnelled into more than 180 bank accounts of third parties to conceal the source of the money.

“These bank accounts involved abnormally frequent transactions,” the source said. “The money was usually transferred in and out of the accounts within one or two days.”

One of the bank accounts belonged to a taxi driver, 31, who was allegedly paid HK$70,000 a month to help the racket launder crime proceeds.

“The syndicate arranged for him to set up a shell company and launder HK$300 million of the illegal funds through cryptocurrency transactions using an overseas trading platform [in a period of six months],” Poon said.

He described the money-laundering ring as “well-established” and “sophisticated” with premeditated and advanced planning.

Officers from customs’ financial investigation bureau launched an investigation into the syndicate after getting tipped off early this year.

After gathering evidence, customs officers raided three flats and a Kwun Tong office during an arrest operation code-named “Fencing” on Wednesday.

The 39-year-old man was arrested in his flat in Tseung Kwan O, while his parents were apprehended in their public housing flat in Shek Kip Mei. The taxi driver was arrested in Sau Mau Ping.

Customs officers also froze the bank accounts of the six companies the family set up containing HK$2.2 million in connection with the case.

During the operation, officers seized mobile phones, computers, company and bank documents and bank cards.

The four suspects were detained on suspicion of money laundering – an offence punishable by up to 14 years in jail and a HK$5 million fine. They have been released on bail pending further investigation.

Further arrests have not been ruled out as authorities continue tracing the final destinations of the illegal funds and bank account holders involved, according to the department.