Illegal banker exchanged billions | Shanghai Daily

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Illegal banker exchanged billions

POLICE in east China have seized an illegal banker who traded 8.5 billion yuan (US$1.24 billion) in foreign exchange deals over five years for more than 4,000 clients.

The banker, He Jiacai, made 11 million yuan in profits, Xinhua reported today.

He was caught in October last year in south China's Shenzhen City.

Police in Jiangsu Province's Yangzhou City came across the man by accident when they were investigating an embezzlement case involving a local government official early last year, the Xinhua report said.

Police discovered that the official's wife deposited the embezzled money into He's bank account. They checked He's account and found there was an abnormally large number of transactions - more than 100 deposits or withdrawals daily. Later police found another 17 suspicious bank accounts connected to He worth 7 billion yuan.

Further investigations found that He, 43, a native of Fujian Province, had started his foreign exchange dealings in 2003.

He set up accounts in China and overseas, according to Pang Kexi, an official with the anti-laundering center of the People's Bank of China's Yangzhou branch.

For example, he used yuan in accounts set up in China to pay foreign currency holders in China who wanted to exchange their currencies for yuan, thus avoiding foreign exchange fees at banks and cutting costs, Pang explained.

He charged a 0.1-0.3 percent commission fee for each deal, compared with the 0.5 percent charged by banks.

He's clients included four mine owners, who had transferred over 20 million yuan at a time.

To avoid being detected, he split the transactions involving large sums into smaller ones.

By the time he was caught, He had opened more than 300 banking accounts in China.

He's business was very popular with people whose children were studying abroad, police said. Parents complained that the official foreign exchange quota was insufficient.

According to China's foreign exchange management rules introduced in February 2007, residents are allowed to exchange up to US$50,000 worth of foreign currency each year.
People can apply to the authority for more but it usually takes months to get approval.

The country's foreign exchange authority has helped police crack down on 24 illegal banking cases last year involving foreign exchange deals worth US$9.53 billion, Xinhua said.



 

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