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Wed, Dec 20, 2006 - Page 10 News List

Beijing shuts down seven illegal banks, arrests 44 money-laundering suspects

AFP , BEIJING

Chinese police yesterday announced that they had shut down seven illegal "underground banks" sus-pected of laundering more than 14 billion yuan (US$1.75 billion) in funds this year.

Police have arrested 44 sus-pects in the crackdown and confiscated 58 million yuan, Han Hao, an economic crime investigator with the Ministry of Public Security, told reporters.

"Under the current conditions of economic globalization, the global movement of capital and the development of high-speed communications, money laundering has exploded," Han said.

"Drug trafficking, smuggling, corruption, graft and other crimes are now closely interlinked and form a serious threat to our nation's political, economic and social security," Han said.

The illegal banks were largely located in the coastal and border regions including Guangdong, Shanghai, Beijing, Inner Mongolia, Liaoning and Heilongjiang, he said.

Criminals were using the illicit banking operations to illegally transfer money and buy and sell foreign currencies, he said.

An illegal operation in Shanghai was suspected of laundering up to 5 billion yuan this year and was organized by an unnamed suspect from Singapore, Han said in transcripts of his press conference on a government Web site.

The underground Shanghai bank was offering remittance, foreign exchange and other banking services between Singapore and China, he added.

"Our attitude in eliminating and severely cracking down on these underground banks is very clear. We will continue to exert high pressure on these activities," he said.

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