Hong Kong and Shenzhen authorities smash HK$620 million iPhone smuggling operation

Authorities have smashed a cross-border gang who used a system of drones, giant motorised wheels, and cables to smuggle more than HK$620 million worth of mobile phones between Hong Kong and the mainland.

In a joint operation, officials arrested 26 people in Shenzhen and seized two drones, two wheels, and 4,000 mobile phones worth HK$20 million. In Hong Kong, customs officers confiscated 900 phones worth HK$4.5 million, and arrested three men in a house in Ta Kwu Ling near the boundary fence.

The sophisticated gang, who authorities said had been operating for the past six months, used the drones to fly two 100-metre cables between two high-rise buildings on Yangfang Road in Shenzhen, and the roof of a village house on the opposite side of the border.

Chen Liang, deputy chief of the Wenjindu branch of Shenzhen’s anti-smuggling bureau, said the gang then worked from midnight to 5am each morning in an effort to avoid detection.

“Each day, 10,000 to 15,000 mobile phones were smuggled across the border,” Chen said. “As they operated 15 days a month, its monthly income reached over 10 million yuan.”

The three men in Hong Kong were arrested on suspicion of exporting unmanifested cargo – an offence that carries up to seven years in prison and a HK$2 million fine under the Import and Export Ordinance.

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A local government source said it took less than a minute to deliver a bag of 20 mobile phones from Hong Kong to Shenzhen, with the gang making more than 200 passes on each cable wire a night.

“It is the first time drones were found being used in cross-border smuggling activities,” the source said.

It is believed to have been the largest cross-border smuggling operation in recent years.

While announcing the details of the February 1 police operation on Thursday, Chen described how the gang flew two drones from two high-rise flats to deliver cable wires across the border, and the wires were secured at the roof of a village house in Hong Kong.

The cable wires were then attached to two giant motorised conveyance wheels in the two flats. Bags carrying smuggled goods were tied to the two cable wires at the roof of the village house before being pulled across the border.

Chen said the syndicate was sophisticated and their smuggling operation was well calculated.

“Inside the two flats, soundproofing materials have been installed to muffle the noise of the roving motorised wheels during delivery,” he said.

Mainland authorities believe the gang had smuggled 500 million yuan (HK$620 million) worth of second-hand mobile phones, mostly iPhones, across the border, evading 100 million yuan in tax.

Customs officers from both sides are understood to have begun investigating the syndicate after receiving a tip-off in January.

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It is not the first time that a gang has used this method to smuggle goods across the border, although using a drone is a first.

In August 2011, mainland and Hong Kong customs officers broke up a syndicate that used a fishing line to ferry gadgets from the city to Shenzhen. The gang had been in operation for about two weeks before being shut down.

The fishing line was believed to have been shot across the border by a crossbow.