Chinese authorities flag financial crimes involving Macau

China’s State Administration of Foreign Exchange and the Supreme People’s Procuratorate jointly released a press release highlighting eight “classic” finance-related criminal prosecutions on the mainland. One of the cases revealed an exchange of up to CNY2.3 billion (US$325.6 million) in Macau, including transactions in Hong Kong dollars.

The case in point was the alleged misuse of Macau point-of-sale (POS) devices to evade restrictions on cross-border money conversion. According to China’s criminal code, the defendants were found guilty of “illegal business operations” in 2022. In order to avoid discovery, the 20-person criminal gang reportedly used POS terminals to carry out transactions that seemed to be on the mainland, while the actual transactions really took place in Macau.

The scam was operational from February 2016 until January 2019, facilitating the transfer of up to CNY2.3 billion in funds. Money trading was conducted using Hong Kong dollars held in “Macau casinos” accounts; each transaction was subject to a 5% service charge. With the assistance of Macau police, the organization’s POS terminals were seized.

‘Xu,’ the alleged author, was sentenced to 10 years in jail and a fine of CNY1.5 million by the Beijing court on May 23, 2022. A total of CNY1 million in penalties and seven and a half years in jail was the second-heaviest penalty meted out to other criminals.

One of the other prominent convictions was a group of people with the surnames “Li” and “Yu,” who led a gang involved in illegal activities worth CNY15.14 million. The group deliberately targeted “Macau’s casinos and hotels” for shady money exchange. More than ten bank accounts were opened by members in Shenyang, where they received and transferred funds for the currency exchange business.

On February 9, a Shenyang court sentenced Li to 2.5 years in prison for “illegal business operations,” with a fine of CNY40,000. Yu had to face an alternative legal process due to prior criminal accusations.

Law enforcement may use the press release as a tool to maintain the stability of China’s foreign currency market and protect the nation’s financial stability.

Original story by: GGRAsia