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Scams and swindles

Millions in laundered cash from email scams filtered through Hong Kong, police say

Sources say unlicensed mainland banks sent recruits to Hong Kong to open bank accounts and send swindled cash abroad

PUBLISHED : Tuesday, 28 November, 2017, 8:01pm
UPDATED : Tuesday, 28 November, 2017, 11:40pm

International fraudsters worked with underground banks from the mainland to launder hundreds of millions of dollars from commercial email scams via Hong Kong this year, the Post has learned.

Unlicensed banks from the mainland were responsible for opening bank accounts in the city to collect money swindled from overseas companies before the cash was channelled to other countries and moved around the world.

In the past, fraudsters from Africa and other countries came to the city to open bank accounts or hire local residents to do so.

The new tactics came to light after officers investigating nearly 500 reports of commercial email fraud with losses of about HK$650 million this year discovered many bank accounts used to collect the swindled money in the city were opened by mainland visitors.

“We believe [the account holders] were recruited by the underground banks who offered them monetary rewards and free sightseeing trips to Hong Kong to open bank accounts [with e-banking services],” one source said. It is understood some came from Fujian province.

He said operators behind the underground banks used their usernames and passwords for e-banking services to transfer the money out of the accounts on the same day as the deposits.

It was understood police have sought help from mainland and overseas law enforcement agencies to tackle such activities.

Latest figures showed the force handled 498 commercial email fraud cases involving the losses of HK$647 million in the first nine months of this year. This year’s biggest case involved an overseas company deceived out of HK$54 million.

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Nearly 60 per cent of the cases, with losses of more than HK$550 million, involved overseas companies, and local police were involved because the swindled money was transferred into bank accounts in the city.

The other cases were reported by local companies that lost about HK$80 million in total.

We believe the syndicates are working with underground banks on the mainland
police source

Investigations indicated international fraud syndicates were behind the scams and targeted businesspeople and companies in Hong Kong and around the world, a police source said.

“We believe the syndicates are working with underground banks on the mainland to carry out illegal money transfers to launder scammed money via Hong Kong,” he said.

But he stressed there was no evidence to suggest commercial email scams in the city were on the rise.

Figures showed the number of commercial email fraud cases dropped by 24 per cent to 498 in the first nine months of this year, compared with 657 in the same period last year. Total losses in the same period last year tallied nearly HK$1.5 billion, with an international corporation in Europe duped out of HK$500 million.

Police said commercial email fraud includes fake CEO scams and bogus business partner scams.

Fraudsters typically hack into the email accounts of targeted businesspeople and companies to learn about their clients and businesses, before using the information gleaned to impersonate senior executives and eventually order the transfer.

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They instruct victims, who think they are dealing with their senior executives or business partners, to send payments or make transfers to their designated accounts.

Another source said some of the emails used to contact and cheat victims were sent from Africa, Europe and the United States, but that did not mean their operations were in those countries.

“Police call on all the members of the public to be alert of suspicious emails, and raise their awareness in preventing this kind of scam, such as taking the initiative to confirm the true identities of recipients or the genuineness of the requests by telephone, facsimile or other means before remittances,” the force said on its official website.

Latest figures revealed the number of deception cases including commercial email scams dropped by 2.7 per cent to 5,879 in the first 10 months of this year, compared with 6,044 in the same period last year. Total losses in that period also fell by about 40 per cent to HK$1.1 billion from about HK$1.8 billion.