Hong Kong’s Customs and Excise Department made significant strides in unveiling a pioneering transnational diamond trading and money-laundering deception known as “Gem Crusher.” This groundbreaking case, a first of its kind, saw the apprehension of four individuals allegedly involved in falsely labeling synthetic diamonds as natural, sparking a notable financial fraud.
The government agency disclosed last week that a series of arrests were made in connection with the syndicate’s activities, which involved the deceptive declaration of synthetic diamonds as high-value natural stones. The operation marked an unprecedented exposure of a sophisticated financial malpractice.
Between December 19 and 20, Hong Kong Customs conducted raids across eight locations, spanning residential and business premises in various areas of the city. Assets worth HKD 8.2 million ($1.1 million) belonging to the detained individuals have been frozen by authorities.
The investigation was set in motion earlier this year following a tip-off received by Hong Kong customs officials, who swiftly initiated a financial inquiry. Collaboration with Indian authorities played a pivotal role in unraveling the complexities of the operation.
The syndicate, operating diamond-trading entities in both Hong Kong and India, conducted a scheme throughout 2021 involving the export of lower-value lab-grown diamonds from Hong Kong to India, deceitfully passing them off as high-value natural stones. Allegedly, this maneuver aimed to facilitate the transfer of sizable amounts of dubious funds from India to Hong Kong. Authorities estimate that the syndicate laundered approximately HKD 500 million ($64 million).
The customs raids resulted in the confiscation of a significant cache of suspected synthetic diamonds, a smaller quantity of natural diamonds, approximately HKD 1 million ($128,055) in cash, as well as electronic devices, corporate seals, financial documents, and other relevant materials.
The four arrested individuals, purportedly the architects and leaders of the syndicate, face charges related to dealing with property known or reasonably believed to represent proceeds of an indictable offense. The investigation remains ongoing, with authorities hinting at the possibility of further arrests as they delve deeper into this intricate case.
