Police uncover an illegal cross-strait remittance scheme

The Criminal Investigation Bur-eau announced yesterday the arrest of a man for his involvement with underground cross-strait remittance operations.

Police said they arrested suspect Hsu Fu-kuo (許富國) in Kaohsiung the previous day, and turned him over to the Prosecutor's Office after initial questioning for violating the nation's banking laws.

Police said Hsu, an investor in a coffee shop in China's Guangdong Province, saw an opportunity in early 2000 when he overheard some Taiwanese businessmen complaining that money they earn couldn't legally be brought back to Taiwan.

They also complained of facing restrictions at China's official banks when needing to withdraw funds in yuan.

Starting early last year, Hsu, his wife Yu Hsiao-lan (尤效蘭), his son Hsu Feng-ming (許峰銘), his partner Ku Chen-fang(顧振芳) and mainlanders Wang Weijun (王緯駿) and Lin Jinbao (林金寶), began using the coffee shop as a cover for an underground remittance operation.

Police said that Hsu would send men to visit Taiwanese businessmen in Dungguan to promote their new underground business. They would take yuan from the businessmen, deposit the money in a mainland bank and alert Ku in Taiwan.

Ku would then deposit an equivalent amount of NT dollars into a phantom account in Taiwan. The exchange rate was based on the exchange rate of the Hong Kong dollar or the US dollar on the black market that day. Hsu and the other suspects would then pocket the exchange rate difference from each deal.

Police estimate that a single month of business volume could have reached NT$400 million.

Police also noted that since joining the WTO, the government is allowing local banks to set up branches in China, creating a legal channel for remittances.

Those who violate banking laws by running underground remittance operations could face up to seven years in prison, they added.