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Wednesday, May 18, 2022

Scammers launder nearly HK$29 billion from victims through Hong Kong bank accounts, cryptocurrency wallets over past 4½ years

Between January and November last year, the squad received 3,454 requests from victims in Hong Kong and overseas to stop payments totalling HK$6.82 billion in defrauded money. Officers intercepted HK$1.48 billion or 21 per cent of funds conned by scammers.

By comparison, anti-fraud officers handled 2,594 stop-payment requests involving HK$8.33 billion in 2020, of which they intercepted HK$3.07 billion or 37 per cent. There were 1,913 requests involving HK$7.23 billion in 2019, with police stopping HK$3.03 billion or 42 per cent of the money.

In 2018, the centre received 1,686 requests to stop a total of HK$5.35 billion, with officers recovering 23 per cent of the money. Between July and December of 2017, they handled 516 requests to stop the payments of HK$1.21 billion and intercepted 18 per cent of the crime proceeds.

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Police attributed the drop in last year’s recovery rate to the rapid development of financial technology and the prevalence of money transfer digital applications.

“In light of the rapid technological advancement and the development of fintech, funds are able to be transferred at a fast pacing,” police said in a written reply to the Post.

Last year saw the rise of using cryptocurrency as a medium for money laundering, according to the force.

“Deception victims are deceived to transfer cryptocurrency to the e-wallets provided by culprits directly,” police said.

“In some cases, it is observed that the scammers have used the deceived money to purchase cryptocurrency with the purpose to launder the crime proceeds. Cryptocurrency enables a much easier and faster cross-border transaction.”

According to a police source, online banking, electronic payment services and cryptocurrency wallets provided a convenient and fast method for transactions, offering fraudsters more avenues to launder illegal funds, making money-tracing work more difficult.

“Through online banking services, a large sum of defrauded money could be divided into smaller portions and transferred into several bank accounts and then laundered through several layers of bank accounts or even channelled out of the city in several minutes after being transferred into one account [controlled by scammers],” he said.

Swindlers often call their victims pretending to be mainland Chinese law enforcement officials. Photo: Shutterstock

Swindlers often call their victims pretending to be mainland Chinese law enforcement officials. Photo: Shutterstock

The stop-payment requests involved a wide range of deceptive schemes, including online romance scams, commercial email fraud, and investment and phone swindles, according to police.

The largest amount of money intercepted by the anti-fraud squad in a single stop-payment request last year involved business fraud in which police recovered US$12 million.

The director of a financial investment company fell victim to a bitcoin investment fraud after being lured into transferring the money into a local bank account by a con artist impersonating a businessman living overseas.

Police said the victim realised it was a scam and called the force in June after the “businessman” used different excuses to delay producing an investment plan and requested further payment.

Last year, the biggest stop-payment request involved a phone scam in which a 90-year-old woman living in a mansion on The Peak was duped by bogus mainland Chinese officials into transferring HK$254 million into three bank accounts between August 2020 and January 2021.

She called police in March and they were able to intercept HK$9 million from bank accounts used by swindlers. The 90-year-old is currently the biggest known victim of financial fraud in Hong Kong.

Another source said that some victims’ bank accounts had been compromised after fraudsters tricked them into revealing credentials such as the username and password of their online banking services.

“Some did not notice the alerts issued by their banks over money transfers. They realised they fell victim to scams only when they found all money had been moved out of their accounts,” he said.

As a result, they sought help from police weeks or months after they made the last money transfer, he said, adding that such a delay could make it difficult to recover the money.

To track down scam proceeds across borders, the force set up a stop-payment mechanism with Interpol in October 2019. Between January and November of last year, HK$116 million swindled from Hongkongers was frozen in bank accounts overseas with Interpol’s help.

“To combat scams, police collaborate with stakeholders in both the public and private sectors to strengthen Hong Kong’s overall awareness and resilience,” the force said in the reply.

“In addition, police are working scrupulously with overseas counterparts to facilitate appropriate intelligence exchange for enforcement as necessary.”

To avoid falling victim to scams, police urged the public not to send money to strangers’ accounts, disclose personal details or download unknown mobile phone apps.

Police also urged the public to call the force’s anti-scam helpline 18222 if they needed advice.

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