Friday, November 20, 2015

China Busts $64 Billion Shadow Banking Network

Authorities in China have cracked the country's biggest-ever underground banking network, which handled illegal foreign exchange transactions worth 410 billion yuan ($64 billion), police said Friday.

The bust comes amid a monthslong crackdown on illicit outflows, which officials say disrupt China's financial management, facilitate corruption and help terrorists and criminals launder their dirty money.

Over 370 people were detained, prosecuted or otherwise reprimanded in the case, police in Jinhua city said in a statement on their website. Jinhua is in Zhejiang province on China's eastern coast, a zone known for its shadowy financial networks.

Police said one leader of the Zhejiang network was a man named Zhao Mouyi, who transferred over 100 billion yuan overseas using 850 different bank accounts and a dozen Hong Kong front companies. It took police nearly a year to sort through over 1.3 million suspicious transactions, they said.

Since April, Chinese authorities have uncovered over 170 big cases of underground banking and money laundering worth over 800 billion yuan ($126 billion), the state-run People's Daily reported.

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