"Luxurious Life Despite Illegal Stay" 280 Billion Won Chinese Hwan-chigi Organization Caught

A Chinese hawala organization was caught by customs authorities. It was confirmed that the members of the organization enjoyed a luxurious lifestyle in Korea despite being undocumented, using the profits earned from hawala transactions.

On the 16th, Gwangju Customs of the Korea Customs Service announced that it had detected three members of a Chinese hawala organization (two Chinese nationals and one naturalized Chinese) including undocumented immigrants, for violating the Foreign Exchange Transactions Act (unregistered foreign exchange business) and sent them to the Gwangju District Prosecutors' Office without detention.

Gwangju Customs has uncovered a Chinese illegal remittance organization and referred it to the prosecution. The amount of illegal remittance from 2017 to recently is estimated to be around 280 billion KRW. A member of the illegal remittance organization is withdrawing cash at a bank's automated teller window. Provided by Gwangju Customs, Korea Customs Service.

The hawala organization entered Korea in 2017 as international students and started small-scale illegal currency exchange targeting Chinese international students. It was investigated that they gradually expanded their scope to become a specialized hawala organization dealing with an unspecified number of individuals, trading companies, and criminal organizations wanting to remit money between Korea and China. The scale of hawala transactions is estimated to be around 280 billion KRW.

In particular, they were involved not only in exchanging study funds for Chinese international students and trade payments for import-export companies but also in exchanging funds related to voice phishing scams, handling criminal funds and black money with unclear origins.

During the investigation, Gwangju Customs confirmed circumstances where the hawala organization avoided customs tracking and concealed the source of funds by recruiting remittance clients online (SNS), receiving the requested funds into dummy accounts, and conducting transactions (transfers) only in cash.

This hawala crime changed from the traditional hawala method in 2017 to a new type of hawala using virtual assets after 2020, and according to Gwangju Customs, the profits obtained through this method also increased relatively.

A co-conspirator in China purchased Bitcoin overseas with funds collected from remittance clients, then transferred it to a domestic virtual asset exchange, where it was sold to earn not only hawala transaction fees but also additional kimchi premium profits.

The income earned from hawala was used by the organization members to live economically luxurious lives in Korea without steady jobs, including purchasing several expensive foreign sports cars.

Earlier, Gwangju Customs also uncovered a hawala crime involving about 250 billion KRW in April. The hawala organization detected at that time included ethnic Korean Chinese participants.

A Gwangju Customs official said, “Large-scale hawala organizations have been caught twice this year in succession,” and added, “Considering that hawala can be exploited as an illegal fund transfer route such as for voice phishing, Gwangju Customs plans to strengthen crackdowns on illegal foreign exchange transactions.”