Hong Kong police seized nearly HK$8 million in counterfeit banknotes and arrested four suspected members of a remittance fraud gang who swindled two victims out of more than 7.1 million yuan (US$1.03 million), investigators said on Friday.
The syndicate ran two phoney money exchange shops in Mong Kok and Sham Shui Po and posted messages online saying the outlets offered preferential rates to lure targets, according to the force.
"Fake banknotes were shown in front of clients to gain their trust and show the shops were capable of handling large money exchange transactions," Senior Inspector Ho Yan-kit of the commercial crime bureau said.
Staff conned the two victims into remitting more than 2.6 million yuan and 4.5 million yuan into two designated bank accounts in mainland China for changing into Hong Kong dollars on November 7 and January 3. When the victims demanded the cash at the shops, the staff made various excuses and did not pay.
After the victims complained to police, officers raided the two shops and arrested two men - a local resident and a mainlander - and a woman, also a local.
Inside the Mong Kok shop, officers seized 5,007 fake HK$1,000 (US$128) notes. Another 2,600 fake HK$1,000 notes were found in the Sham Shui Po shop.
Ho said investigations showed the syndicate was behind the two shops, neither of which held a money service operator licence issued by the Customs and Excise Department to carry out a remittance or money changing service.
He said the licences and business registration certificates on display in the two shops were fake.
In a follow-up investigation, officers arrested a 28-year-old man on Friday during a raid on his Cheung Sha Wan flat, where 331 fake HK$1,000 bills and a large quantity of semi-finished forged notes were found along with fake business registration certificates and a retractable baton.
Ho said the man was suspected to be the core member of the syndicate.
Describing the fake banknotes as poor quality, he said: "The seized notes do not have security features such as watermarks and do not have an embossed feel. The fakes are easily distinguished."
As of 5pm, the man was still being held for questioning and had not been charged.
According to police, investigations by officers from the commercial crime bureau was continuing and further arrests were possible.
Police advised the public to use money changers with a good reputation or banks and to verify that shops held relevant licences.
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