A massive operation that laundered money and transferred funds out of China was recently uncovered in Shaoguan City, in China’s southern province of Guangdong.
On Nov. 22, China’s state-run mouthpiece Xinhua reported that the underground bank had handled more than 20 billion yuan (roughly $3 billion) worth of funds, involving 148 fraudulent accounts by more than 10,000 clients from more than 20 provinces. Seven suspects were detained.
Chinese authorities were clued into this illegal bank in July, when they observed suspect activity at a branch of a state bank in Shaoguan. The account they focused on, opened under the surname Zhong, showed 121 transactions in 2016 in which money was rapidly added and removed, amounting to 98 million yuan (roughly $14.8 million).
The reports show that Chinese residents are still trying to take money out of the country, a phenomenon that has taken place for years. Underground banks are also a common means used by corrupt officials for funneling their assets abroad.
A Chinese yuan currency sign with two arrows through it, pictured outside a bank branch in Shanghai on August 13, 2015. Johannes Eisele/AFP/Getty Images
In 2015, the Chinese regime cracked down on such operations nationwide, in an attempt to stabilize the economy and keep the yuan from depreciating.
However, underground banks continue to be revealed in the press from time to time. Earlier this year, underground banks were found in other cities in Guangdong Province, as well as in Yangzhou City in Jiangsu Province, involving hundreds of millions of yuan.
According to official data, Chinese authorities had uncovered more than 380 underground money shops last year, with 900 billion yuan (roughly $13 billion) in transactions.
