China has cracked its biggest cross-border foreign exchange scam,
involving more than US$40 million, it was announced Friday.
The illegal transactions occurred in the city of Weihai in East
China's Shandong
Province, China's Central Television (CCTV) quoted the State
Administration of Foreign Exchange and the Ministry of Public
Security as saying.
Ringleader Zhao Shengxuan and five other accomplices have been
tried and sentenced by a local court.
The criminal gang had operated a currency black market between
China and South Korea since 2000, said the CCTV report.
First, they changed the Chinese currency Renminbi into South Korean
won by selling Renminbi to some foreign ventures in China. These
companies' South Korean offices sent the South Korean currency to
an account established by the crime ring in South Korea.
These Korea won were changed into US dollars in South Korea and
then brought into China in batches and sold at a profit.
The US dollars traded by Zhao's group have been bought and sold in
nearly 10 cities and regions including Qingdao and Yantai of
Shandong, and Shenyang and Yanji of northeast China.
A
growing number of illegal foreign exchange transactions across
China's borders have been exposed in recent years, according to
Zhang Aidong, a senior official of the State Administration of
Foreign Exchange.
The illegal money involved is probably used for smuggling
activities, drug trafficking or other illegal activities, Zhang
noted.
Zhang's administration and the Ministry of Public Security have
jointly decided to strengthen controls over cross-border foreign
exchange markets in the future.
Money laundering in particular has become a problem in recent
years, Zhang noted.
Since 2002, Chinese public security departments have cooperated
with their counterparts in other nations to follow up more than 70
leads on money laundering cases which involve about 17 countries
and regions.
Money laundering normally involves the illicit transfer of money
from China to other countries with the help of underground private
banks both in China and abroad.
Zhang's administration and public security departments will jointly
launch a special nationwide campaign in the second half of this
year to fight against the underground banks.
(China Daily July 5, 2003)