Exclusive | HK$20 billion-a-month surge in suspicious ATM withdrawals hits Hong Kong banks after Macau rolls out facial recognition
Phenomenon emerges after neighbouring casino hub steps up security and Beijing sets strict limits on ATM use, leaving Hong Kong as a clear target for ‘money withdrawal gangs’
Hong Kong banks have been hit by an unprecedented HK$20 billion-a-month (US$2.55 billion) surge in suspicious ATM withdrawals, exposing a legal loophole which could deal a significant blow to the battle China is waging against illicit capital flight via its notorious underground banking system.
This left Hong Kong – where the holder-authorised use of multiple bank cards by someone else is perfectly legal – as an obvious replacement. According to sources who have spoken to the South China Morning Post, an individual can withdraw up to HK$30 million a day.
In a letter of complaint sent on Thursday to the Asia-Pacific Group on Money Laundering – a regional offshoot of the respected Financial Action Task Force of which mainland China, Hong Kong and Macau are members – banking insiders estimate that across the city’s ATM network up to HK$20 billion a month is being withdrawn.
The practice has also spawned a knock-on rash of robberies targeting the people after they leave the ATM loaded up with cash. A senior law enforcement source said the problem had reached the stage where on Thursday police chiefs issued an internal, force-wide “crime alert” notice on the subject.
Two Chinese men carrying 50 bank cards robbed of HK$350,000 at ATM in Hong Kong
In recent months there has been a rash of arrests of people using multiple bank cards, but in every case they have been released unconditionally because they have been able to provide proof that the holder authorised them to use their bank card.
The Post understands that legal advice given to police by the Department of Justice was to mount a prosecution using laws on the unauthorised use of counterfeit or forged bank cards, not money laundering. The department had not responded to questions on Thursday night.
In response to inquiries from the Post, a spokesman for the Monetary Authority did not dispute any of the figures on the level of withdrawals.
The authority said there were “many reasons” for fluctuating ATM withdrawal levels but acknowledged that Macau’s facial recognition technology move “may also increase cash withdrawal activity in Hong Kong”.
“The new rules promulgated by the State Administration of Foreign Exchange, which changed the maximum amount of overseas cash withdrawal for mainland card holders to 100,000 yuan (US$15,668) per person per annum and have taken effect from January 1 this year, may impact cash withdrawals through ATMs in Hong Kong from now on,” the Monetary Authority spokesman said.
“We are monitoring the situation closely and will liaise with police and the banking industry, should it become necessary to introduce appropriate measures in light of actual circumstances,” he added.
A police source, speaking on condition of anonymity, said: “It is one of the ways the underground banking system gets around mainland currency restrictions. It is a really common occurrence.
“There have been arrests but no prosecutions because they have the authority to use the cards. They work in teams next to each other withdrawing large sums in multiple transactions. Not surprisingly local criminals have twigged the racket and there have been a couple of big robberies. They simply stand next to the guys doing it then take the money off them.”
Asked for arrest figures relating to the practice, a police spokesman said: “The police do not maintain your requested figures.”
