“Dealing with the complexities of investigating money laundering connected to cryptocurrency posed significant challenges due to its inherent anonymity and lack of jurisdictional constraints,” remarked Florence Yeung Yee-tak, the head of the financial investigation division at customs, on Thursday.
The enforcement team acted upon intelligence inputs, employing capital flow analysis and financial scrutiny in their operations. The crackdown, which took place on Wednesday, targeted four residential units, five businesses, and two licensed money service providers, culminating in the apprehension of suspects.
Among the three individuals apprehended—a 42-year-old woman and two men aged 48 and 60—it was revealed that they collectively established five companies and operated 18 local bank accounts from June 2021 to July 2022. These entities were involved in over 1,000 dubious transactions linked to untraceable funding sources.
The arrested trio, who were not acquainted with each other, were allegedly part of a sophisticated money-laundering network. The female suspect, unemployed at the time, played a pivotal role in the illicit financial activities by receiving transfers from various entities and cryptocurrency platforms, subsequently channeling the funds to other accomplices through licensed money changers.
The Customs and Excise Department disclosed that the woman managed HK\(900 million of the illicit funds, while one of the male suspects, a 60-year-old driver, handled HK\)300 million, and the other, a self-employed individual, oversaw HK$600 million.
Investigations by customs uncovered that the illicit funds originated from a cryptocurrency exchange platform and over 200 local and international enterprises. These funds were rapidly dispersed to other entities once they reached the shell companies’ bank accounts, which purportedly operated in sectors such as mobile phone accessories, machinery wholesales, and vehicle parts, despite engaging in transactions unrelated to their stated business activities.
The apprehended trio, considered the key operatives of the criminal syndicate, were targeted in the operation codenamed “Racer,” resulting in the dismantling of the illicit network. Seized during the operation were mobile phones, corporate documents, stamps, and transaction records, aiding in ongoing investigations to trace the fund’s source and destination.
While the three suspects were arrested for suspected involvement in money laundering activities, they were subsequently released on bail. The offense of dealing with proceeds of an indictable offense carries a maximum penalty of 14 years’ imprisonment and a HK$5 million fine for those found guilty. Customs authorities have not ruled out the possibility of additional arrests as the investigation unfolds.