A syndicate allegedly involved in laundering more than HK$500 million by trading cheap synthetic diamonds as genuine natural diamonds has been dismantled by the joint efforts of Hong Kong and India Customs authorities.
Four individuals, aged 30 to 56, including the alleged mastermind and core members, were apprehended by Customs officials. The syndicate, based in Hong Kong, purportedly conducted around 130 exports of counterfeit diamonds weighing between 200 to 500 carats to India from January to October in 2021. Among those arrested, three are non-Chinese individuals holding positions as company director, manager, and assistant, while the fourth individual is a 56-year-old Hong Kong resident.
Yeung Yuk-man, acting deputy head of the Financial Investigation Group at the Customs and Excise Department, highlighted the collaborative efforts between Hong Kong and Indian authorities that led to the disruption of the first-ever money laundering case involving diamond transactions.
The syndicate allegedly misrepresented synthetic diamonds valued at approximately HK$5 million as genuine natural diamonds, falsely inflating their worth to an estimated HK$500 million. Financial irregularities in the company’s bank transactions, distinct from regular trading entities, aroused suspicion.
“This marks the first instance where the Customs department has identified a money laundering case involving diamond transactions in Hong Kong,” Yeung remarked.
Customs officials encountered challenges in cracking the case due to the small size of synthetic diamonds, making them easier to transport and more difficult to detect. Yeung noted that the naked eye often struggles to differentiate between genuine, high-value natural diamonds and synthetic ones, which are considerably cheaper.
Chan King-wai, Bureau Divisional Commander, emphasized that the syndicate exploited synthetic diamonds closely resembling high-value natural ones for their ease of portability and low transportation costs but substantial market value.
During recent raids on eight premises, including four offices in Tsim Sha Tsui and residential locations, authorities seized a significant quantity of suspected synthetic diamonds, a small collection of natural diamonds, approximately HK$1 million in foreign currency, electronic devices, and relevant documentation.
The detained suspects have been released on bail while HK$5.7 million from their accounts has been frozen. Customs authorities are pursuing a freeze on a commercial property valued at HK$2.5 million.
Under the Organized and Serious Crimes Ordinance, individuals convicted of money laundering could face a maximum penalty of HK$5 million in fines and up to 14 years’ imprisonment.
