Foreign exchange authorities, police crack underground banking case involving $2.21b
Published: Sep 01, 2021 08:20 PM
Photo: Xinhua

Photo: Xinhua

China's foreign exchange authorities and local police have cracked a huge underground banking case connected to illegal foreign exchange activities in Macheng city, Central China's Hubei Province, involving 14.3 billion yuan ($2.21 billion), involving people from 25 provinces, according to media reports. 

The foreign exchange authorities in Hubei transferred information to local police in Macheng in August 2019, showing that a human resources company in the city was suspected of being an underground bank involving illegal trading of foreign currencies, China Central Television (CCTV) reported on Wednesday.

The daily transaction volume of the accounts under the name of the human resources company was extremely large, according to CCTV, adding that the bank flows of the average daily transactions amounted to more than 2 million yuan, and the total amount of funds in the accounts reached more than 400 million yuan.

The police found that the company was claiming to provide human resources services, but it was actually promoting illegal foreign exchange transactions. 

The company was controlled by an overseas group that had multiple domestic outlets in China. The main culprit, surnamed Xu, was in charge of operations in China. He hired friends and relatives to set up outlets specializing in illegal foreign exchange activities. 

The Macheng People's Court held a hearing on the case on June 16, and the suspects pleaded guilty and repented. The court will deliver its verdict at a later date.

Since 2020, China's foreign exchange authorities have cooperated with the police to crack more than 150 underground bank cases, investigate and deal with more than 3,000 counterparty cases, and impose administrative fines of more than 800 million yuan, said CCTV, citing officials from the State Administration of Foreign Exchange. 

Global Times