Hong Kong police arrest 5 in crackdown on crime syndicates behind laundering of HK$105 million using tens of thousands of prepaid cards
- HK$8,000 limit for one-off prepaid cards designed to prevent anonymous money laundering, according to police
- Two wine trading companies purchased over 40,000 prepaid cards worth more than HK$20 million between September 2021 and August 2023
Hong Kong police have arrested five men in a crackdown on crime syndicates behind the laundering of HK$105 million (US$13.4 million) using tens of thousands of prepaid cards.
The five men, aged 42 to 59, were arrested on suspicion of conspiracy to launder money and were allegedly linked to eight local companies that used prepaid cards and Apple iTunes cards in Hong Kong.
Yau Tsim District Inspector Yip Yan-wa on Saturday said the force acting on intelligence arrested one man in August.
“Police arrested a 59-year-old local man outside an electrical appliance shop in Tsim Sha Tsui,” she said. “He was in possession of 300 one-off prepaid cards and 200 Apple iTunes cards.”
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Yau Tsim District Chief Inspector Tse Tsz-fung said the HK$8,000 limit for one-off prepaid cards was designed to prevent anonymous money laundering.
“But in this operation, it was found that large sums of money were used to purchase these prepaid cards, which were then distributed to a network of people to spend in different areas,” he said.
After the arrest in August, police uncovered eight companies that were laundering money using the same tactic and detained four more men on September 7.
Officers seized computers, phones, large quantities of receipts, bank cards, bank documents, prepaid cards and cash.
Two wine trading companies purchased over 40,000 prepaid cards worth more than HK$20 million between September 2021 and August 2023, according to police.
The prepaid cards were used to buy Apple iTunes cards of the same value at various supermarkets and convenience stores in Hong Kong.
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But police found a vast difference between the business volume of the two companies and the sum of money used for purchasing the prepaid cards.
“Syndicates first purchased goods with unexplained capital, which would then be sold to retailers at lower than market price,” Yip said.
She said the money received, which was now “clean”, would be used to buy prepaid cards to be distributed to various people to buy products that were easy to resell. In this case, they were Apple iTunes cards.
Four other companies were involved in what police called “U-shaped” money laundering. They laundered their criminal proceeds through suspected illegal money changers, which received large sums of unexplained cash from Japan in the past three years.
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The sums were then washed using shell companies in Hong Kong, with the money transferred to prepaid cards that were sent back to Japan, according to police.
The suspects seemed to be ordinary workers in Hong Kong, but they actually ran shell companies that had no operations or tax records in the city and dealt with large sums of unexplained cash, Yip said.
The five arrested suspects had been granted bail pending investigation. Police said more arrests were possible.
