8 jailed for illegal foreign exchange trading

A cross-regional network was found to be involved in illegal forex deals worth an estimated 228 million yuan (US$34.4 million).

Eight people who ran an underground foreign exchange system involving multimillion dollar transactions have been sent to jail, according to the Pudong New Area People’s Court.

The network was set up by a 60-year-old woman surnamed Sun, a Hong Kong resident staying in Shanghai, after she was released in December 2013 from prison on charge of illegal foreign exchange deals.

The forex deals in her latest illegal operation are worth an estimated 228 million yuan (US$34.4 million), the court said on Monday.

Sun said she obtained access to large amounts of foreign currency from a family based in Hong Kong and found clients via three domestic bank employees.

One of the three, surnamed Ge, said he met Sun in 2014 and introduced her to clients who had used up their foreign exchange quota. Under China’s foreign exchange control rules, the quota for foreign currency buying for individuals is US$50,000 per year.

Ge said Sun could earn 1 to 2 yuan for every US$1,000 transacted. And he made an additional 0.01 percent of each transaction as a kickback.

Between May 5, 2014 and July 2016, the network was found to be involved in transactions worth US$18.07 million, HK$ 58.47 million, 8.75 million Canadian dollars, 550,000 British pounds, 2 million New Taiwan dollars, 830,000 euros and 29.52 million Japanese yen.

Seven of the group were caught on July 10, 2016, and Ge handed himself over to police the next day.

They were convicted of illegal operation and received sentences from two years with two years reprieve to eight years.


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