Laundering 117 Billion Won with Chinese Syndicate: Illegal Bank Account Ring Referred to Prosecutors

Seven Detained; Chinese Ringleader on Red Notice
Criminal Group Charges Filed Against Key Members
Members Sent to China to Aid Phishing; Organized Crime Also Involved

A domestic organization distributing illegal bank accounts, which laundered 117 billion won in criminal proceeds in collaboration with a Korean money laundering syndicate based in China, has been handed over to prosecutors. Initially, this group only supplied illegal bank accounts, but later escalated their crimes by sending domestic members to China to directly participate in phishing activities and money laundering.

On May 20, the Seoul Metropolitan Police Agency’s Metropolitan Crime Investigation Unit announced that it had referred 33 people—including the ringleaders of the domestic illegal account distribution organization, identified as Mr. A (28) and Mr. B (29), as well as members of the Chinese money laundering syndicate and organized crime groups—for prosecution on charges including violation of the Act on Regulation and Punishment of Concealment of Criminal Proceeds. Of these, seven individuals, including Mr. A and Mr. B, have been detained. An additional 27 key members face charges under the Criminal Act for organizing a criminal group. Separately, 116 individuals responsible for virtual asset transfers have been referred without detention on charges including violation of the Act on Reporting and Use of Certain Financial Transaction Information.

Park Gurak, Head of the Metropolitan Crime Investigation Division 6 at the Seoul Metropolitan Police Agency, is conducting a briefing on the distribution organization of forged bankbooks at the Mapo Government Complex in Mapo-gu, Seoul on the morning of the 20th. Photo by O Ji-eun

According to police, Mr. A’s group was formed around March 2024 by recruiting acquaintances and local associates, creating a structured organization. Using lower-level members, they recruited and opened illegal bank accounts, then delivered them to voice phishing groups, earning financial gains. The money laundering syndicate, operating out of Shenzhen, China, is accused of laundering criminal proceeds totaling about 86 billion won up to August this year using illegal bank accounts.

Police investigations found that accounts supplied by Mr. A’s group received approximately 31 billion won in criminal proceeds between March 2024 and May of the previous year. Most of these funds were from victims of voice phishing, investment fraud, and investment guidance scams. The Chinese money laundering group was led by Mr. Kim (48), who ran a phishing scam organization. In August last year, Mr. Kim recruited another ringleader, Mr. C (44), to take charge of operating the money laundering syndicate. The police have obtained an arrest warrant for Mr. Kim, who is currently staying in China, and have requested an Interpol Red Notice. His passport has also been invalidated.

During the investigation, it was discovered that organized crime groups were also involved in the scheme. Eight members from three organized crime groups under police surveillance distributed illegal bank accounts to other phishing groups and collected commissions. Some even joined Mr. A’s organization directly to act as recruiters for illegal bank account holders.

Mr. A’s group established “shell companies” by issuing fake tax invoices and forged supply contracts. Using these entities, they visited local banks to open illegal bank accounts and distributed them for use in criminal activities. If an account was frozen due to a report from a phishing victim, they would call the bank directly or contact the victim to ask for the freeze to be lifted. They tried to deceive the banks by claiming the corporation was conducting legitimate business, while coaxing victims by promising partial compensation if they would lift the freeze.

Mr. Kim’s group committed voice phishing crimes using the illegal bank accounts received from Mr. A’s organization. They then transferred the stolen funds to secondary accounts, converted the money into gift certificates, or used domestic exchanges to purchase coins and other virtual assets. These funds were subsequently laundered again through overseas exchanges. In terms of money laundering methods, Tether (USDT) accounted for 72%, while 19% involved companies posing as gift certificate vendors.

Conversation content in which the organization of Mr. A intends to dispatch its members to the organization of Mr. Kim located in Shenzhen, China. Seoul Metropolitan Police Agency

Initially, the relationship between Mr. A’s and Mr. Kim’s organizations was limited to the supply of illegal bank accounts, but from March last year, their criminal activities became more organized. Mr. A’s group began sending its members to China, where Mr. Kim’s group was based, to directly participate in phishing and money laundering activities, receiving 3–6% of the laundered criminal proceeds as compensation. If convicted of organizing a criminal group, they could face harsher penalties than for general crimes.

During the investigation, police seized approximately 1.38 billion won in criminal proceeds as a pre-indictment preservation measure.

A representative from the Seoul Metropolitan Police Agency stated, “Even if you are unaware that you are committing a crime, you can be punished if you accept money from others and transfer it as virtual assets for a commission. Please be aware that most of these transactions involve laundering criminal proceeds, and exercise caution to avoid becoming involved in criminal activities.”

This content was produced with the assistance of AI translation services.