Hong Kong customs has arrested five people on suspicion of laundering HK$8.9 billion (US$1.1 billion) in suspected crime proceeds over a four-year period, with investigators for the first time uncovering a syndicate using sophisticated fake shipping websites for “phantom trading”.
Senior Investigator Tsoi Kim-fai of customs’ financial investigation bureau said on Tuesday that the operation last week led to the arrest of two men and three women, aged 28 to 59, who allegedly operated 29 bank accounts to process more than 3,700 suspicious transactions between January 2022 and this month.
Tsoi said that “phantom trading” referred to trade that did not exist in reality, with no actual imports or exports of goods. Such exchanges relied on falsified documents, such as fake contracts and invoices, to create bogus transaction records.
Using these records, criminals could disguise illicit money as legitimate trade income, allowing them to transfer large amounts of money while concealing the true source of the funds, he said.
“This is the first time customs has discovered a money-laundering syndicate using elaborately designed fake websites to complement their falsified trade documents. This was done to disguise ‘phantom trading’ and the underlying money-laundering activities,” Tsoi said.
“The amount involved is massive, and the methods used are more complex than in previous cases, significantly increasing the difficulty of the investigation.”
