Cops Discover Underground Banks Move ￥800 Billion in 7 Months

In the seven months since April, authorities have uncovered 92 cases of illegal money transfers involving underground banks, the sums involved exceed ￥800 billion, or about $130 billion. That average case is $1.4 billion and the annualized total is roughly $225 billion! And these are only the cases discovered by law enforcement. How many underground banks remain in operation?

From October 10, Economic Times: China tracks $126 billion embezzled by corrupt officials abroad

Chinese government is tracking corrupt officials who fled abroad over the years with about $126 billion, the country's Central bank said today.

Yesterday, the story was published in China and it claims some of the cases are financial fraud.

According to the latest data released by People's Bank of China, so far since April of this year, the country has cracked 92 cases of underground banks and transfer the illegal proceeds, involving more than 800 billion yuan. "From the cracked case, the underground banks involving more and more, the more subtle means of exchange, and becoming corrupt funds 'laundering tool', and even some bank staff also worked as a 'mediation'." National Foreign Exchange Management Commissioner administers Inspection Department Ouyang recently told Xinhua News Agency reporters Du Jiajie and Shao Dangqian new trends underground banking.

The government says there are financial crimes involved, plus other crimes and terrorism:

According to Deputy Minister of Public Security Meng Qingfeng introduced, underground banks not only involve financial , securities and other economic crimes, but also increasingly for a variety of criminal activities of illicit money transfer channels, become corrupt elements and violent terrorist activities of "money laundering tool" and "accomplice." Despite the crackdown it has achieved initial results, but the criminal activities underground banking situation is still severe and complicated, involving diffusion region was spreading trend.

According to reports, in just the detection of "Shanghai futures market manipulation Gao Yan case", the suspect is through the "underground banks" illegal profits of nearly 200 million yuan of the transfer abroad; previous concern embezzlement of 800 million yuan, "China Alpine Bank case "" Zhoukou grain storage case "and so is the use of underground banks transfer money.

Criminals are able to set up underground banks that meet regulatory scrutiny:

"The company is controlled by underground banks 'shell', the information is false, if the banks do a little dot of verification, you can find doubt. But precisely because of the existence of the bank to fulfill terms of oversight responsibilities, it provides a channel for criminals . "Ouyang said.

In China, you dot your I's and cross your T's. Bureaucrats don't care what is in the box, as long as you fill out the box. Furthermore, some bank employees are helping the underground banks by acting as middlemen, finding willing bank customers who will allow the underground bank to funnel money through their accounts:

Ouyang said: "All along, regulators require banks to customer transactions authenticity due diligence, but the actual situation is far not been done recently discovered cases, some banks even use staff resources to start introducing bank customers to the businesss."

Beam Jianping told reporters that some members of the long-term underground banks in the banking, downtown to attract business, once discovered that someone needed foreign exchange, and other services to take the initiative to promote acceptance. June just to close the net, involving more than 12 billion yuan in Shenzhen large underground banks case, a bank branch in Shenzhen Shen was born governor offered membership for Hong Kong businessman Chen of the huge sums of money transferred abroad, in fact, use of underground banking channels. A large number of suspects "customer" confirms the reason they find underground banks, are taken by bank employees or other presentation of friends and acquaintances.

Zeng Gang China Academy of Social Sciences Institute of Finance, the bank director said the bank should "manage their door, look after their own people", by strengthening internal control, earnestly fulfill Account Holder's review and traceability; at the same time, we must enhance the external legal constraints on increased supervision of financial criminal activity, an increase in crime costs from the system.

iFeng: 地下钱庄黑幕：7个月转移8000亿 银行内鬼频出