Chinese Police Puts an End on Two Underground Banks Funneling Money to Macau Casinos

    Chinese Police End Two Underground Banks thumb

    The Chinese police have reported they disrupted two underground banking networks. These illicit operations were used to funnel money from mainland China to Macau casinos. Thanks to several successful raids, authorities managed to put these networks, working out of Shaoguan, out of operation.

    Chinese Police End Two Underground Banks

    Routing Huge Sums

    According to the report, these banks were involved in transactions worth RMB 20 billion, which is around $3.1 billion. They acted as intermediaries, helping thousands of clients move money to Macau casinos or exchange Yuan for other currency.

    Acting on a tip, the police launched a full-scale operation that resulted in the arrest of seven individuals. Authorities were tipped off by a dormant account that suddenly sprung back to life. Last year, 121 transactions were done from and to the account, in the total value of $15 million.

    Initially, the investigation led the police to an individual named Shen. This person deposited money to another account, opened in the name of one Zhong, a resident of Macau. Zhen was in charge of making sure Shen would get HKD or a different currency upon his arrival to Macau.

    Following further investigation, the police identified as many as 148 suspicious bank accounts. It turned out these were open using false identities for purposes of funneling money to Macau. At the moment of seizure, the accounts contained around RMB 30 million, and this amount is currently frozen.

    Chinese Police End Two Underground Banks laundry

    Facilitating Gambling

    Gambling is illegal in China and Chinese residents aren’t allowed to legally gamble anywhere. For that reason, wealthy Chinese looking to play in Macau need alternative methods to fund their play. Underground bank networks like these two offer these much-needed services. For their efforts, these banks charge a commission of up to 0,7%.

    It is no secret that rich Chinese players have been some of the best Macau customers for a long time. Lately, however, the Chinese government has been taking a much harsher approach to the entire matter. Authorities have been cracking down on illegal gambling rings and operations facilitating money transfers.

    This new approach left big consequences on the Macau economy, as it caused a big decline in its gambling revenues. It wasn’t until August of last year that Macau finally got out of the slump and saw a positive trend once again.

    Chinese Police End Two Underground Banks

    Chinese authorities have introduced other measures to put a stop on illegal gambling activities. This includes changes to China UnionPay debit card system. In 2016, the system saw a total of $626 million in illicit withdrawals, which is clearly a disturbing number.

    To try and stop these activities, UnionPay has introduced facial recognition technology. Now, UnionPay ATMs in Macau are equipped with this technology, ensuring only actual card owners can make withdrawals.

    It is hard to say how many these illegal money transferring operations there are. Their services are clearly in high demand, so there are many of those looking to make profit on transfer fees. However, Chinese authorities have been going all out against these activities, which will definitely make lives harder for the people behind them.

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