Hong Kong police have arrested 100 individuals in a significant crackdown on fraud and money-laundering syndicates, recovering over HK$180 million (US$24.2 million) from 295 victims.

In a two-week operation code-named “Widepeak,” which concluded on Monday, 75 men and 25 women were detained on suspicion of money laundering and obtaining property by deception. 

Cryptocurrency Scam Amongst Others

Hong Kong police arrest 100 suspects linked to scams totalling HK$180 million in losses

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— Hong Kong Free Press HKFP (@hkfp) May 22, 2024

Chief Inspector Cheng Ki-fung of the Sham Shui Po district crime squad disclosed that most suspects were holders of stooge accounts, with occupations ranging from cleaners and chefs to decoration workers. These individuals allegedly loaned or sold their bank accounts to criminal syndicates, enabling the collection and laundering of scammed money in exchange for a cut of the proceeds.

Chief Inspector Cheng revealed that the suspects were linked to 82 cases of deception. These included investment scams, employment fraud, internet love scams, e-shopping swindles, and telephone deception. The most significant financial loss stemmed from an investment scam targeting a 74-year-old businessman. An online acquaintance lured him into investing in cryptocurrency and swindled him out of HK$23 million.

Inspector Wong Sze-ki highlighted another notable case involving an online shopping scam. This scam deceived 54 victims into spending more than HK$70,000 on supposed discount tickets for travel, theme parks, and hotel staycations.

In response to these rising scams, the police have advised the public to utilize the force’s “Scameter“ search engine, available through the CyberDefender website or app, to verify suspicious or fraudulent schemes. The search engine helps identify dubious web addresses, emails, platform usernames, bank accounts, mobile phone numbers, and IP addresses. The force’s 18222 “Anti-Scam Helpline“ is also available for assistance.

The crackdown was launched following a nearly 30% rise in reported deception cases in Sham Shui Po district, escalating from 1,873 in 2022 to 2,419 last year. The district recorded 706 deception cases in the first four months of this year alone.

Superintendent Chen Chi-cheong, assistant Sham Shui Po district commander, emphasized the importance of targeting stooge accounts, which are vital to fraud networks for collecting and laundering illicit funds. He warned the public against lending or selling their bank accounts to others, as they could face money laundering charges punishable by up to 14 years in jail and a HK$5 million fine.

The Rising Concern of Crypto Fraud in Hong Kong

The city experienced a 42.6% increase in all deception cases last year, with 39,824 reports filed, up from 27,923 in 2022. Financial losses from these cases surged by 89%, rising to HK$9.1 billion in 2023 from HK$4.8 billion the previous year.

Superintendent Chen added that over 200 holders of stooge accounts were arrested by Sham Shui Po police for money laundering and conspiracy to launder money in the past year. Prosecution has been approved, and charges have been filed against 111 individuals. 11 convictions led to prison sentences ranging from four to 28 months.

As reported on May 21, scammers target South Korean crypto users with an Ethereum-themed scam. Fraudsters send alarming text messages to users, warning them that their ETH coins will be “burned“ on May 22 if they do not act quickly. 

The messages, allegedly from a fake global cryptocurrency exchange named Bit-Finance, urge users to withdraw their funds immediately to avoid losing them. Recipients are directed to a phishing site where scammers attempt to steal wallet details and passwords.

Police and regulators have noted the rise in such scams, with cybercrime related to virtual assets increasing in South Korea. Last year, the National Police Agency dealt with 167,688 cyber fraud cases, a 7.68% increase from 2022, with crimes involving virtual assets accounting for 38.3%. Between January and April of this year, 2,209 reports of financial losses due to crypto scams were filed with the Financial Supervisory Service, 17.7% of which were related to phishing attacks. 

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