Chinese officials caught the biggest "underground bank" in the country, which circulates transactions amounting to an estimated sum of 410 billion yuan ($64 billion).
Eights gangs involved and their 100 members have been in custody of the eastern China police since the operation began in September. All eight gangs are suspected of having connections with a single mastermind in Hong Kong that allegedly runs inactive companies to launder money and foreign exchange deals, according to CNN Money.
Police identified Zhao Mouyi as the head of the Zhejiang network who allegedly transferred 100 billion yuan abroad. He allegedly used 850 bank accounts and other companies in Hong Kong since China only allows its citizens to transfer $50,000 overseas every year. Police investigated the 1.3 million transactions for almost a year, according to the Associated Press.
Another individual allegedly acquired export rebates amounting to 20 million yuan by collaborating with a different company that handles forgery of contracts and transaction invoices while buying foreign currency, as well, Reuters reported.
Since December last year, 56 suspects for money laundering were arrested, and frozen bank accounts totaled to 3,000. Starting in August, Chinese police have closed 37 banks, Xin Hua News reported. China is facing issues with illegal financial institutions that allow money laundering of funds acquired through corruption, online gambling and fraud.
Chinese official have admitted that the underground bank issue in China is starting to become "increasingly severe," according to Fox News. The ties that are maintained by corrupt individuals on post, criminals and terrorists worry officials because these could contribute to weakening financial management in China.
