Seven held as Chinese police probe US$3bn underground currency racket

Suspects said to have made huge profits exchanging yuan for Hong Kong dollars in underground banking scheme to move cash out of mainland China

PUBLISHED : Thursday, 23 November, 2017, 2:27pm
UPDATED : Thursday, 23 November, 2017, 10:57pm

Seven people have been arrested in southern China for alleged involvement in an underground banking scheme involving more than 20 billion yuan (US$3 billion).

Economic crime investigators from Shaoguan police in Guangdong province said more than 10,000 suspects may be involved in a massive underground currency syndicate, the state-run news agency Xinhua reported.

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The seven suspects made huge profits exchanging yuan into Hong Kong dollars, the report said, without giving details.

China’s public security ministry cracked down on more than 380 illegal underground banks last year, involving over 900 billion yuan, as the authorities attempted to stem an exodus of cash flowing out of the country as the value of the nation’s currency weakened.

The authorities places limits on the amount of cash that can be moved out of China, leading some to use underground banks to get cash overseas illegally.

After months of investigation Guangdong officers found suspects used 148 bank accounts across more than 20 provinces, registered with fake identification, police were quoted as saying at a press briefing on Wednesday.

One suspect, whose full name was not given, deposited more than 50 million yuan over time into a bank account owned by the syndicate.

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The deposits were then channelled into smaller sums to different bank accounts before they were converted into Hong Kong dollars for the man’s use after he travelled to Macau to gamble, the report said.

The most recent arrest in the case was made earlier this month in Guangdong, with 30 million yuan in assets frozen.

Guangdong police said the investigation was still ongoing.