Hsinchu County prosecutors yesterday indicted eight people suspected of working with Chinese criminal groups to launder money and defraud people who believed they were legitimately investing in cryptocurrency.
After receiving tip-offs, prosecutors and police carried out four raids between November last year and last month, targeting Taichung-based Xuhui Huanyu Technology Co (旭輝寰宇科技公司), its offices, staff and the homes of company executives, the Hsinchu County District Prosecutors’ Office said in a statement.
Two Taiwanese, surnamed Chang (張) and Tsai (蔡), allegedly set up the partnership with Xuhui Huanyu owner Wu Kuan-huan (吳冠寰) to create a cryptocurrency platform, said Yeh Tzu-chen (葉子誠), the prosecutor in charge of the case.
Photo courtesy of the Hsinchu District Prosecutors’ Office
The company would place online advertisements promising profits from investing with them and offering services to convert tether cryptocurrency to New Taiwan dollars, Yeh said.
Chang and Tsai, who had worked in China, allegedly have ties to Chinese criminal groups in Xiamen, China, who are engaged in fraud and investment scams, he said.
An investigation found that 53 Taiwanese had been defrauded of a total of NT$51.69 million (US$1.73 million), the statement said.
Chang, Tsai and Wu were charged with contraventions of0 the Money Laundering Control Act (洗錢防制法) and the Organized Crime Prevention Act (組織犯罪防制條例), Yeh said.
The five other suspects were listed as accomplices, Yeh said.
The operation began in August last year, when Chang returned to Taiwan to work with Wu, whose company focused on computer equipment, software and system services, the prosecutors said.
Together they transformed the Taichung company into a cryptocurrency operation that allegedly laundered money for Chinese criminal organizations, Yeh said.
Along with company staff participating in fraudulent activities, Wu also hired people to communicate with victims, facilitate transactions. and pass on to them forged receipts and accounting statements, the prosecutors said.
The suspects used encrypted messaging apps, such as Telegram and FaceTime, to evade monitoring, making it difficult for judicial investigators to track their actions in real time, the statement said.
Victims were led to believe they could make money using Wu’s firm to buy and trade tether, with Wu providing an e-wallet to register the transaction and providing documents containing the date of transaction and the amount, it said.
That was all part of the fraud, as the amount was transferred to accounts controlled by heads of the criminal ring, while Wu received a 0.6 percent commission, Yeh said.
Wu would in turn pay the people who facilitated the scam directly with the victims receiving a 0.2 percent commission, while other staff involved in collecting money from victims would receive a one-time cash payment of NT$3,000 to NT$5,000, he said.
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