Hong Kong Police Bust $24 Million Fraud Ring

Hong Kong police nabbed 100 people in a fraud & money laundering bust. Stooge accounts, crypto scams, & romance cons targeted 295 victims, police urge vigilance against online schemes.

In a significant crackdown on fraud and money-laundering syndicates, the Hong Kong police have apprehended one hundred individuals and recovered more than HK$180 million (US$24.2 million) from 295 victims. 

On Monday, 75 men and 25 women were apprehended in connection with a two-week investigation codenamed “Widepeak.” The investigation was ended on suspicion of money laundering and property acquisition by deception. 

Cryptocurrency Scam: One Of Many

Chief Inspector Cheng Ki-fung of the Sham Shui Po district crime squad disclosed that most suspects held stooge accounts and were employed in various trades, including decoration workers, chefs, and cleaning.

In exchange for a portion of the proceeds, these individuals allegedly sold or lent their bank accounts to criminal syndicates, thereby facilitating the accumulation and laundering of fraudulent funds. 

According to Chief Inspector Cheng, the suspects were associated with 82 instances of deceit. Investment fraud, employment fraud, internet romance schemes, e-commerce cons, and telephone deception were among these.

An investment scam that targeted a 74-year-old merchant incurred the most substantial monetary loss. An online acquaintance deceived him out of HK$23 million by convincing him to invest in cryptocurrencies.

Inspector Wong Sze-ki emphasized an additional noteworthy instance of cyber-commerce fraud. This fraud duped 54 individuals, causing them to part with over HK$70,000 in alleged savings on hotel staycations, theme parks, and travel discounts. 

The police have issued a public advisory advocating for using the “Scameter” search engine, accessible via the CyberDefender website or app, to authenticate dubious or fraudulent schemes in light of the escalating prevalence of such schemes.

The search engine assists in the identification of questionable IP addresses, bank accounts, mobile phone numbers, website addresses, and email usernames. Also accessible for assistance is the 18222 “Anti-Scam Helpline” of the force. 

Enforcement was initiated in response to a nearly 30% increase in reported cases of deception in the Sham Shui Po district—from 1,873 in 2022 to 2,419 last year. The district documented seventeen instances of deception exclusively during the initial quarter of this year. 

The assistant Sham Shui Po district commander, Superintendent Chen Chi-Cheong, underscored the importance of focusing on surrogate accounts, which are indispensable to fraudulent networks to amass and launder illicit funds. Individuals who engage in money laundering activities by lending or selling their bank accounts to others risk money laundering charges, which carry a fine of HK$5 million and imprisonment for a maximum of fourteen years. 

Cryptocurrency Fraud: An Increasing Concern in Hong Kong

In the past year, the number of deception cases reported to the city increased by 39,824 (42.6%), compared to 27,923 in 2022. In 2023, financial losses associated with these cases increased by 89%, from HK$4.8 billion in 2022 to HK$9.1 billion. 

According to Superintendent Chen, Sham Shui Po, police arrested more than two hundred proprietors of stooge accounts in the past year on charges of money laundering and conspiracy to launder money.

Prosecution has been granted in the 111 individuals against whom charges have been lodged. The resulting prison terms for eleven convictions varied from four to twenty-eight months. 

As reported on May 21, scammers target South Korean cryptocurrency users with an Ethereum-themed scheme. The scammers notify users via urgent text messages that if they do not take immediate action, their Ethereum coins will be “burned” on May 22. 

The fraudulent communications, purportedly emanating from Bit-Finance, a global cryptocurrency exchange, implore users to withdraw their funds promptly to prevent any potential loss. Scammers redirect recipients to a phishing website to capture their wallet information and passwords. 

Law enforcement agencies and regulatory bodies have observed a surge in fraudulent activities involving virtual assets in South Korea. The National Police Agency handled 167,688 cases of cyber fraud in the previous year, an increase of 7.68% compared to 2022; virtual asset-related crimes comprised 38.3% of these incidents.

The Financial Supervisory Service received 2,209 reports of financial losses from cryptocurrency schemes between January and April; phishing attacks accounted for 17.7% of these reports.