By Jess Ma

Copyright scmp

Hong Kong customs has uncovered its largest money laundering case this year, arresting four individuals involved in suspicious transactions totalling HK$2.6 billion (US$334 million) across more than 50 bank accounts linked to three shell companies.
A 25-year-old man and a 52-year-old woman, both employed at different money service operators, together with two male directors of an investment company, were arrested in late August and earlier this month.
They were suspected of carrying out suspicious local transactions using three companies without business records, which were set up by the two money service operator employees.
“Customs officers have realised that there were no companies operating at the registered addresses, while these firms also had no customs declaration records for trade. We suspect they were shell companies,” said Michael Ng Sze-chai, an investigator with the Customs and Excise Department’s financial investigation bureau, on Tuesday.
The case came to light after customs officers noticed unusually large transactions in two companies established by the man and another firm established by the woman.
Investigations revealed that the two directors, aged 53 and 56, had instructed the two money service operator employees.
They had opened more than 50 business accounts across four banks, conducting more than 6,000 suspicious transactions involving nearly 1,800 trading partners between August 2023 and January this year.
Officers found that these accounts received HK$2.6 billion from various local business accounts before transferring the funds to other bank accounts linked to different locally registered companies.
Ng said the largest single transaction by these firms was a transfer of HK$26 million in 2024. The origin of the transaction remains under investigation.
Customs said that both of the firms transferring money to the three suspected shell companies and those receiving funds were registered with generic business descriptions such as selling electronics, merchandise or trading, but had no relevant trade or business records.
“The transactions showed the hallmark of money laundering: the [receiver] would quickly transfer the sum away, transactions would be [layered], and they would transfer back the money to the sender,” Ng said.
As an example of a “layered” transaction, the suspected shell companies received HK$2.3 million over five transactions in two days but transferred the entire amount to another account the following day.

“Their transaction partners claimed to be seafood and watch sellers, which were irrelevant to the [three] firms’ business, making the transactions unreasonable,” Ng added.
The amounts involved also significantly exceeded the declared revenue of the three suspected shell companies in their tax return filings, the investigator revealed.
Officers are still examining whether the investment company is linked to the two money service operators where the arrested employees worked, despite the two claiming not to know one another.
The sources of the HK$2.6 billion remain under investigation.
All four suspects are currently out on bail. Under Hong Kong law, money laundering offences carry a maximum penalty of 14 years’ imprisonment and a fine of HK$5 million.
The department’s previous largest money case involved HK$14 billion carried out through transnational trade. It was uncovered in February of last year.