Hong Kong anti-fraud squad intercepts nearly HK$1.3 billion from online and phone scams – half the swindled cash that has moved through city in 2019

More than HK$2.6 billion (US$331 million) from nearly 830 victims of internet and phone scams has been transferred in and out of Hong Kong bank accounts in the first half of 2019.

Half of the illegal money moving through the city was intercepted by officers of the Anti-Deception Coordination Centre, who launched a range of operations to uncover scams that originated in Hong Kong and around the world. The remaining HK$1.3 billion was pocketed by international fraudsters.

Force insiders said the defrauded money was usually laundered through several “layers” of bank accounts before being channelled out of the city – generally in less than 24 hours.

“In each case, our officers had to race against time,” a source said.

A portion of the cash seized by local anti-fraud officers was some US$18 million (HK$140 million) that was scammed from an investment company in Uruguay. It was this year’s largest single loss intercepted by the anti-fraud squad.

According to police, email scammers impersonating a business partner tricked the South American firm into transferring US$18 million into two Hong Kong bank accounts in April.

“The company staff realised it was a scam and made a report to the police through its lawyer in Hong Kong,” a police spokesman said. He said local officers froze the money in the bank accounts before it was siphoned off.

Email scammers typically hack into the computers or email accounts of targeted companies and businesspeople. They use the information to impersonate business partners, clients or executives and order money transfers.

For the first time was since the anti-fraud squad was set up in July 2017, its officers managed to freeze defrauded money in an overseas bank account.

The squad, set up under the Commercial Crime Bureau, pools police resources to handle fraud cases and runs a 24-hour hotline. The special unit collects intelligence, formulates strategies, offers support and organises investigations.

A police source said the transfer of HK$21 million to a bank account in Malaysia was seized in cooperation with Malaysian authorities in January.

International email scams involving Hong Kong hit HK$1.5 billion for the year so far

“We have frozen defrauded money in bank accounts in Hong Kong and China, but it is the first time we intercepted the payment of swindled money in an overseas bank account,” the source said.

The Post was told that police had this year seized tens of millions of dollars linked to different types of scams from bank accounts on the mainland.

Between January and June, the squad received 829 requests to intercept payments of HK$2.61 billion from victims of scams in Hong Kong and around the world. Officers halted the payments totalling HK$1.29 billion to fraudsters in 304 of the cases.

In the same period last year, there were 680 requests involving HK$2.29 billion. Police helped to freeze more than HK$350 million in 180 of the cases.

Some of the requests were made by overseas companies and law enforcement agencies. Hong Kong police were involved because the money was transferred to bank accounts in the city.

The funds were defrauded in a range of deceptions, including online romance scams, commercial email frauds, investment and phone scams.

Another source said swindlers used individual and company bank accounts to collect and launder the illegal money. Some of the account holders were mainlanders believed to have been recruited by underground money exchangers who worked with international fraudsters to launder the swindled money.

“A large sum of money is usually divided into smaller portions and transferred into several bank accounts and then laundered through layers of accounts before being transferred out of Hong Kong to other countries in Asia, America or Europe,” the source said.

He said in one case, dozens of bank accounts were used to launder a huge amount of money.

The source said the money was divided up to avoid raising suspicions from bank officers.

In the first six months of this year, the Joint Financial Intelligence Unit received 24,027 reports of suspicious financial transactions. There were 73,889 such reports in all of 2018 and 92 per cent of the reports were lodged by banks.

The anti-fraud unit, which is staffed by police and customs officers, is responsible for assessing all reports made in Hong Kong about suspicious transactions. Cases it believes deserve further investigation are forwarded to investigators elsewhere in the police force or to the Customs and Excise Department.