Hong Kong police arrest 14 over suspected laundering of HK$560 million in crackdown on criminal syndicate
- Force alleges group processed funds through sales of online tokens used to buy gifts and rewards for influencers
- Senior Inspector Kwong Yin-ting says it is first time police have discovered such a method for money laundering
Hong Kong police have rounded up 14 residents in a crackdown on a local criminal syndicate behind the alleged laundering of more than HK$560 million (US$71.3 million) in crime proceeds over nine months.
Senior Inspector Kwong Yin-ting of the force’s financial intelligence and investigation bureau on Thursday said the syndicate laundered the illegal funds through 46 bank accounts and two key opinion leader management companies the gang had set up.
Investigation suggested the racket bought online tokens with criminal proceeds from the two companies, she said. The group then cashed in by selling the tokens to people who used them to buy gifts and rewards for influencers during online shows.
A source familiar with the case said the syndicate sold the tokens to internet users at a discount of up to 30 per cent. “A single monetary reward an influencer received could reach a five-digit amount,” he said.
Kwong said it was the first time police had discovered such a method of money laundering in an effort to cover up the flow of illegal funds. But she did not reveal how much money was laundered through this method.
The syndicate laundered more than HK$560 million between November 2021 and July 2022, according to the force.
About HK$60 million of the illegal funds were linked to 66 deception cases that included 33 phone scams, 27 investment frauds and three online romance scams, the senior inspector said.
Kwong said the syndicate also recruited people to set up bank accounts that were used to launder illegal funds.
“The investigation showed each account holder was paid HK$2,000, but they had to hand over their bank cards and the account details and passwords to the syndicate,” she said.
After identifying those involved, officers swung into action and arrested 11 men and three women in a series of raids on Wednesday.
Kwong said three of the suspects were the alleged core members of the syndicate and the others were holders of bank accounts that were used to launder crime proceeds.
The Post learned that the three alleged core members were in charge of the two companies. The others worked as salespeople, delivery men and decoration workers, while others were unemployed.
The suspects were detained on suspicion of money laundering – an offence punishable by up to 14 years in jail and a HK$5 million fine.
During the operation, code-named “Swordwielder”, police intercepted more than HK$4.5 million in crime proceeds, according to the force. Officers seized 26 mobile phones, two computers, bank cards and related documents.
Kwong said police were still investigating the final destination and recipients of the illegal funds, adding the investigation was still under way and further arrests were possible.
All 14 suspects were still being held for questioning as of Thursday afternoon.
