China: Money laundering exposed after suspect visits banks 'too often'

CHINA'S biggest money laundering racket involving fives billion yuan (US$633 million) was uprooted in Shanghai when a bank reported that a customer visited the bank a dozen times a day.

The anti-money laundering bureau of the People's Bank of China, Shanghai Branch, received a report from the Pudong Branch of the Bank of Communications about a man who had been making money transfers every day from the first quarter of last year, China's Central Television reported.

"We asked him to apply for a VIP card, which would give him preferential treatment as he seemed to be a really big client, with extremely busy business and large accounts of money," recalled an official with the Pudong branch. "However, he refused every time."

"It was really strange that he kept making money transfers at different windows of the bank, and showed no dismay at the long queues in front of him," the official said.

A later investigation by the bureau of the central bank uncovered that he wasn't working alone, and his accomplice was working in other banks in Shanghai.

"It's obviously a money laundering case," said Fan Ruqian, a vice director with the bureau's Shanghai branch, which soon reported the situation to the city's public security bureau.

The Singaporean suspect, who has been arrested with another three suspects in Shanghai, has been accused of operating an underground bank in the city, making large money transfers and providing foreign exchange and other banking services between Singapore and China.

Zhu Hai, an inspector with the economic crime investigation department of the city's public security bureau, told CCTV they discovered that the four men had made at least 20,000 transactions through 2004 to May of 2006.

"That means they had to visit local banks no less than 30 times a day for the five billion yuan of illegal funds, except on holidays and weekends," Zhu said.

Yang Yimin, another vice director with the central bank, told CCTV that 17 million yuan of the illegal funds was confirmed to have come from north China's Tianjin.

"We are still investigating the clients of the underground bank," Yang said.

Last October, the national legislative body adopted China's first anti-money laundering law, which expands the definition of money laundering to include corruption and bribery, and gives the central bank greater power in investigations.

The law, which went into effect on January 1, requires financial and some non-financial institutions to maintain client and transaction records, and to report large, suspicious transactions.

The institutions are also empowered to freeze capital for up to 48 hours to prevent corrupt officials from shifting their illicit gains.

http://www.shanghaidaily.com/article/?id=302261&type=Metro