Customs seizes HK$200m in assets after cracking fuel-smuggling racket

PUBLISHED : Tuesday, 08 June, 2010, 12:00am
UPDATED : Tuesday, 08 June, 2010, 12:00am

Customs has frozen assets valued at HK$200 million after smashing a cross-border diesel-smuggling racket and arresting 153 people in a joint operation with mainland enforcers.

The syndicate smuggled an average of 43 million litres of untaxed diesel a month from Hong Kong to the mainland with a turnover of HK$120 million a month, a senior customs official said yesterday.

The asset seizure was a record for the Customs and Excise Department and the first in a diesel-smuggling case. 'We have uprooted the whole syndicate and emptied the pockets of the key figures by putting restraints on their assets,' special task force head Superintendent Chong Wai-ming said.

The syndicate is accused of using 20 fishing boats to smuggle untaxed diesel - dyed red and legal only for marine use - to Huizhou in Guangdong, where the dye was removed and the fuel sold to factories.

The pump price of diesel is about HK$7 a litre on the mainland, but the untaxed fuel costs about HK$4.20 a litre in Hong Kong.

Those arrested included 23 Hong Kong residents, among them four directors of a local oil barge company - two couples - and their employees.

Nineteen of the 23 were arrested in Hong Kong, while a Hong Kong businessman who owns a fleet of 20 fishing boats, and his three assistants, were nabbed on the mainland.

The HK$200 million worth of assets frozen include HK$20 million in cash, HK$140 million in bank deposits, seven luxury flats, two BMWs and valuables, the senior customs officer said. 'HK$20 million in cash was seized from the residence of a couple who are the directors of the oil barge company,' the officer said.

'The valuables, worth about HK$1 million, include jewellery, gold ornaments and luxury watches and were seized from bank safe deposit boxes.'

He said the assets of the key figures of the syndicate were suspected to be the proceeds of smuggling.

Senior superintendent Kwok Ngan-ping, head of customs' intelligence bureau, said it was the first time the department had invoked the Organised and Serious Crimes Ordinance to freeze proceeds in relation to a diesel smuggling case.

Investigation showed that the syndicate consisted of three parties, according to the department.

The oil barge company was responsible for buying the fuel from companies in Hong Kong and the owner of the fishing boats for smuggling it to Huizhou. The oil was stored in the fuel tanks of his boats, which wer eenlarged from 5,000 litres to 80,000 litres. Their mainland partner was responsible for treating the dyed diesel work and the sale and distribution to mainland factories.

Hong Kong and Guangdong customs began investigating the syndicate late last year.

Yesterday, Huang Shadong, deputy director of the anti-smuggling bureau of Guangdong customs, said 134 people, including four Hongkongers, were arrested in Shenzhen, Huizhou and Heyuan during the operation, which started on January 31 and involved 1,000 mainland officers.

Ten fishing boats, 33 trucks, 33 cars, 600,000 litres of fuel and four million yuan were seized.

Investigation is still continuing.

In custody

The number of people arrested on May 3 when 140 Hong Kong customs officers raided 19 locations in connection with the diesel-smuggling racket: 19