HK Banks Used to Launder Over HK$8bn in Scam Proceeds in 2020

More than 10,000 bank accounts are believed to have been used in 2020 to collect and launder the funds before being channelled out of Hong Kong.

More than HKD 8.33 billion (USD 1.07 billion) stolen from the victims of online, phone and investment scams was laundered through thousands of Hong Kong bank accounts last year, the South China Morning Post has reported.

The Hong Kong Police Force’s Anti-Deception Coordination Centre intercepted nearly HKD 3.07 billion of this, highest for any year since it was established in July 2017. This compares to HKD 3.03 billion intercepted in 2019 and HKD 1.23 billion in 2018.

The HKD 8.33 billion in 2020 involved nearly 2,600 stop-payment requests from victims of a wide range of deceptions, including online romance scams, commercial email fraud, and investment and phone scams.

More than 10,000 bank accounts – both personal and business – are believed to have been used to collect and launder the funds before being channelled out of Hong Kong. These accounts are commonly set up by individuals recruited from mainland China and other countries, or they belong to locals who are paid to allow their accounts to be used for money laundering.

The biggest stop-payment request last year involved a case of email fraud in which a US-based company was duped into transferring USD 60 million into a Hong Kong bank account in June, before the money was intercepted by anti-fraud officers.

Last year, the Anti-Deception Coordination Centre stopped more than 360 people from falling victim to scams, while employees from local banks helped stop another 109, a police source said.

Deception cases in Hong Kong nearly doubled last year, from 8,216 in 2019 to 15,553. This has been attributed to an increase in online shopping fraud and Covid-19 related scams. Investment fraud and online romance scams have also increased.

Police have offered to teach bank staff how to identify would-be victims of deception, noting they should be on alert in particular for elderly patrons who attempt to set up online accounts without a legitimate rationale, as they may have tricked by phone scammers posing as mainland law enforcers.

In October 2019, the Hong Kong Police Force set up an Interpol stop-payment mechanism in order to track scam proceeds across borders. This has resulted in about HKD 48 million being frozen in overseas bank accounts as of December 2020.

The biggest of the Interpol cases involved a Hong Kong clinic that was duped by fraudsters posing as an overseas mask supplier into transferring HKD 20 million to 14 overseas bank accounts in February 2020. HKD 15 million of this was recovered.

In Hong Kong, money laundering carries a maximum penalty of 14 years in jail and a HKD 5 million fine.

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