Hong Kong banks caught up in ‘boiler room’ money laundering schemes

Simon Deane was recently interviewed by the South China Morning Post in regards to money laundering schemes.

According to the SCMP, Thailand and Philippines-based “boiler rooms” laundered cash worth hundreds of millions of US dollars through Hong Kong’s banking system over the past decade, according to incriminating documents released online by aggrieved investors now angling for financial settlements with boiler room kingpins – and the banks that helped them.

Simon commented that while Hong Kong has historically prospered as a light-touch conduit for international capital, banks are legally required to conduct due diligence on new account holders and monitor accounts for suspicious cash flows.

Boiler room accounts generally see a high frequency of small deposits coming in from various countries. Money is then removed from accounts in cash withdrawals. Such transaction patterns could indicate a money laundering technique called “smurfing” said Simon. “This is where the customer due diligence comes in. The bank should check what type of business the customer operates before opening the account and continue to monitor the customer’s business.”

Key Contacts

Simon Deane

Consultant | Banking and Finance

Email or call +852 2825 9209