Once again dirty money has been laundered through HSBC Hong Kong, and once again the perpetrators are British boiler room scammers based in southeast Asia.
A European victims’ group has filed complaints to HSBC’s headquarters in London and Hong Kong accusing the ‘pirate bank’ yet again of money laundering for organised crime through its southeast Asia headquarters.
The Vienna based EFRI, European Fraud Recovery Initiative, representing victims of British southeast Asian based boiler room scammers, has expressed disgust that the bank has been able to continue assisting organised crime, despite being legally required to implement more stringent anti-money laundering operations.
HSBC has had to pay out US$6.5 billion in civil fines relating to 39 breaches of banking regulations since 2000 notoriously caught put as laundering bank for Mexican drugs cartels.
The British government has also been repeatedly criticised internationally for its inability to act against the bank.
In the latest action investigators have been able to access bank statements of the fraudsters showing high level withdrawals from accounts taking place several times a day, which should have immediately set off money laundering alarms. They have also identified bank officials whose names came up frequently in relation to the fraud account openings.
They identified 110 fake companies which had been set up in with accounts to match to receive the cash from boiler room fraud. This showed that HSBC was clearly the preferred bank of choice for organised crime groups.
Elfriede Sixt, spokesperson for EFRI said:
“We claim that HSBC either knew about the wrongdoing or at least wilfully acted negligent regarding the fraudulent activities within its enterprise related to the two fraud schemes.
Therefore, we assume that HSBC participated in an association-in-fact enterprise with the criminal organisations and made themselves accomplices in defrauding thousands of unsuspecting European retail investors.
“We assume that HSBC’s actions, namely the deliberate neglect of a legally required adequate set-up of a risk management system and other organizational units to prevent money laundering, were motivated by pure economic self-interest in order to gain a competitive advantage.”
“The increasing status of Hong Kong as fraud central should not come as a surprise to Hong Kong’s bankers. It is already well known to the media and police. Back in 2018 the South China Morning Post warned that ‘thousands of bank accounts’ had been set up in Hong Kong to carry out fraud. The suspected figure has varied from 3000 to over 10,000 accounts.
Money laundering in Hong Kong carries a penalty of 14 years imprisonment. Although some bank staff were arrested In January this year, they are believed to be comparatively low level.
“It’s the largest case we have busted in recent years,” Yip Wing-lam, a superintendent at the commercial crime bureau, told the SCMP, adding it was the first-time local bank staff had been arrested for involvement in money laundering. A US$1 million was found in the public housing apartment of one of those arrested.
British boiler room scammers have operated with impunity in southeast Asia for over twenty years due to corruption within government and police, notably in Thailand, Indonesia, Malaysia, and the Philippines. Victims describe most of the scammers as English from the southeast, possible London, Essex and Kent based in Malaysia and Thailand.
The Bangkok bosses of some of these groups have been associated with the murder of ‘whistle-blowers’ or alternatively paying police to set them up on false charges such as drug possession and in one case with sex with a minor. (The man was later released after the women in question admitted she was 26 and been paid to make the allegation.)
Along with influential people in Thailand they have also been able to get away with severe anti-social behaviour such as running over and killing people while drunk or under the influence of drugs.
An investigation by the Economic Crime Unit of London’s City Police, better known as the City Fraud Squad, into a British run boiler room group in Bangkok was abandoned in 2015. Dyring the investigation it’s main man in Hong Kong retired to join HSBC’s banking security department.
Listen to a British scammer calling himself Michael Pearson but also known as Michael Kennedy, who has sold fake shares angrily defending his integrity
(For recordings of other scammers – go here
After the Brinton Group boiler room scam in 2001 which took down Australians for over $400 million the scammers were merely deported from Bangkok and allowed to return the next week. And the bosses were merely fined for being in breach of Thai Securities Exchange Commission for trading without a licence.
Due to claimed failures by the Australian Securities and Investment Commission defrauded money, which had been frozen in Hong Kong Bank accounts was eventually released to the scammers.
In most of the recent scams a mainland Chinese national was used to open the bank accounts on behalf of a fake share trading company. Once the account was set up the Chinese director was replaced by a European.
The scammers created a web history of their companies using such companies as Business Wire and fake stories of these companies as supposed legitimate wealth management companies were inserted into the websites of financial publications such as Bloomberg.
They then proceeded to offer shares in fake Fin-tech mainland Chinese companies in the world’s fastest developing nation. which was already being billed as successfully booming again after Covid.
In the recent pro-democracy troubles China has remained unconcerned about Hong Kong’s status as a financial centre. The Shanghai is much larger and the island of Hainan is being opened up as a free port to rival Hong Kong.
All of this went over the head of a former boiler room arranger whom I contacted who fixed the receiving banks for the fraud cash.
“For the lack of stating the obvious Hong Kong has been known as a money laundering centre created by the British since its inception. The banks know. The authorities know. I dealt with fiduciary companies. They knew and they did not care. Some of these companies were secretary companies and I had to fly to Hong Kong for the annual meetings. The fiduciary company took a percentage on all money transactions.”