39 suspects arrested in illegal POS scheme involving RMB30b

In an update to a case earlier reported by the Times, a total of 39 suspects have now been arrested in an underground money laundering scheme involving more than RMB30 billion (USD4.4 billion). According to Xinhua, the investigation is ongoing and involves assistance from various police entities in Macau and mainland China.

In the latest development in the case, it was found that a criminal gang led by a suspect surnamed Xu registered point-of-sale (POS) machines on the mainland and illegally brought them to casinos in Macau for gamblers to cash out using their credit cards.

Illegal point-of-sale terminals have been used as a method for mainland punters to circumvent Beijing’s capital controls for years, allowing them to gamble with the funds or send them further abroad. In response, Macau authorities last year stepped up efforts to crack down on the method.

Mainland police authorities established a forward office base in Zhuhai as part of the investigation, whichbegan in November last year. The purpose of the base was to monitor border crossings by the gang members and gather evidence leading to their arrest.

Mainland authorities sent over 100 officers for a coordinated strike in Beijing, Hebei, Hubei, Guangdong and Macau, according to the latest reports on the case, simultanously arresting three dozen operatives and freezing bank accounts and other assets worth billions. In addition, four vehicles, 32 illegally converted POS machines, and a large number of computers and bank cards were confiscated.

The Beijing Municipal Public Security Bureau said that the successfully coordinated strike has created a precedent for the Beijing and Macau police to jointly crack down on cross-border underground banks. It is a sign, they said, of Beijing’s determination to tackle economic crimes and prevent emerging financial risks.

According to the South China Morning Post, mainland authorities say they disrupted more than 380 underground banks in 2016, detaining more than 800 suspects with over RMB900 billion involved. Official data for 2017 is yet to be released, but police authorities indicated that there were fewer than 100 such cases during the year.