Hong Kong slow to act on suspected money-laundering scheme that duped Filipino maids, legal experts say
Post learns scams prey on migrant workers and may involve fraud as well as money laundering
Hundreds of Filipino domestic workers in Hong Kong duped into paying for bogus jobs in Canada and Britain may have been fraud victims as well as unwitting contributors to a money-laundering scheme that authorities have ignored, legal experts claim.
They also warned the city was fast becoming a “hotbed” for scams preying on migrant workers.
According to documents seen by the Post, people linked to a maid agency under scrutiny used international banks locally to repeatedly transfer millions of Hong Kong dollars in small sums to Burkina Faso, Malaysia, Nigeria and Turkey.
The issue surfaced in 2016 when about 200 domestic workers complained to the Philippine consulate that long-established Emry’s Employment Agency and its sister company were allegedly charging between HK$10,000 and HK$15,000 each to apply for jobs in Britain and Canada that never existed.
That year, the agency – a top recruiter in the city of Filipino domestic workers – had its licence suspended and local authorities started investigating the case.
Scores of domestic workers have since filed civil claims seeking compensation, with a case at the District Court involving more than 100 domestic workers expected to begin in May. But some documents indicate the number of victims might total about 700.
Ester Ylagan, owner of Emry’s and the related company Mike’s Secretarial Services, previously denied any wrongdoing and claimed she was also duped.
However, experts looking into the case said more than fraud was involved.
David Bishop, a specialist in accounting and law at the University of Hong Kong, said the criminals preyed on “hopeful migrant workers”.
“They use these scams either to extract money or as portals for human trafficking, or both,” he said. “Jurisdictions like Hong Kong are becoming hotbeds for this behaviour, and are woefully unprepared to deal with such issues.”
Bishop, a former corporate lawyer, described city officials as reluctant to delve into the case and ill-prepared to investigate financial crimes. He said the conduct had been reported “many, many times, including by the victims, the Philippine government, by myself, by other lawyers and legal experts, and yet there have been no arrests, and seemingly little investigation or work”.
In addition, he claimed the work authorities had done thus far had been “all based on the fraud elements, and not on the more serious and important financial crime elements like money laundering”.
According to documents including police statements and financial records seen by the Post, Ylagan and people related to her transferred more than HK$7 million to individuals whose addresses were in Burkina Faso, Malaysia, Nigeria and Turkey. Many of the transfers were made in small batches and from multiple locations in Hong Kong, sometimes within the same day. Transfers were sent using Moneygram, Western Union, HSBC, Standard Chartered and Reilsons.
Bishop said the way the money circulated raised multiple red flags. “By not acting, [the authorities] have made it clear that they do not understand or prioritise these types of cross-border financial crimes,” he said. “It should not take this long or this much effort from so many people to just investigate such an obvious case of money laundering .”
A police spokesman said that since 2016 the force had received reports from 210 people alleging they were deceived by an employment agency.
He said police had also received a report from “a foreign woman stating that her employment agency was deceived of some HK$7.9 million by a foreign man”. The description matches Ylagan’s profile.
Both cases were classified as “obtaining property by deception”. The spokesman did not comment on money laundering suspicions.
“A consolidated investigation ... is under way,” he said. “No arrest has been made so far.”
By July 2016, Ylagan had refunded a few workers, and that month she said in a police statement seen by the Post that in December 2015 she noticed an advertisement on Facebook about business opportunities in Britain. She started corresponding through the social network with two account holders: “William Clinton” and “Agency Clinton William”.
Ylagan said she was asked to provide applicants for “spectacular jobs” in Canada and Britain. In return, she expected to receive a “personal UK passport, 15 air tickets to London and an opportunity to explore the UK business market”.
Ylagan, a Philippine native and long-time Hong Kong resident, claimed in the statement that no cash as commission was involved and that she then began recruiting workers and transferring money to various places.
The businesswoman said she had no personal information about Clinton and that she ended up a victim too. But she did not explain at the time why she had to transfer money to various countries.
On July 27, 2016, a Facebook user posted on the Emry’s Employment Agency page that she had been deceived. “They knew already the situation that they will not be able to process any application but they still collected HK$6,680,” the post read. “They promised us they can still process our helpers’ documents and we trusted them … They are big liars.”
The Post contacted Emry’s Employment Agency and Ylagan for comment.
Jalilo Dela Torre, labour attaché at the Philippine consulate in Hong Kong, said he was waiting for local authorities to conclude investigations. He said he was aware of other cases that involved recruitment to other locations.
“We have already shut down four agencies that were recruiting workers to Russia and Mongolia,” Dela Torre said. “We also know that some other agencies in Hong Kong have sent workers to Turkey and Azerbaijan. This involves bogus jobs and even human trafficking operations. However, there is little we can do about agencies that are not registered with us.”
Last year, Manila imposed a three-week ban on the export of labour by suspending the issuance of overseas employment certificates due to “persistent reports of illegal recruitment” and “pernicious activities of certain unscrupulous individuals preying on Filipinos”.
Following the clampdown, Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor pledged to take “vigorous enforcement action against any local employment agencies that conduct illegal activities in Hong Kong”.
The city has no anti-human-trafficking laws. A police spokesman said the force treated “any form” of trafficking in persons cases “very seriously” and had adopted a multi-agency approach to prevent and combat human trafficking.