The Chinese government started to crack down on illegal underground banks last year, arresting more than 100 suspects. (Photo : www.oann.com)
The trial for a group of gang members allegedly involved in China's largest underground banking case opened Wednesday, Jan. 13, in Zhejiang Province, the Xinhua News Agency reported.
According to prosecutors at the Lanxi City People's Court in Lanxi City, the ringleader, identified by his surname Zhao, and his wife, Zheng, were accused of hiring seven other people to run illegal foreign exchange transactions using shell companies on the mainland and in Hong Kong.
The prosecutors said that Zhao also allegedly bribed two senior bank officials in Zhejiang while seeking excessive profits.
The report said that the case involves over $9.6 billion, the highest among a series of smaller cases that make up China's largest underground banking case, which involves transactions totaling 410 billion yuan ($64 billion).
In November last year, around 100 suspects belonging to eight gangs were rounded up and detained by law enforcers in Zhejiang following a crackdown on underground banks suspected of illegally transferring more than 800 billion yuan ($125 billion) out of the country into foreign currencies.
According to the Ministry of Public Security, the country is facing an "increasingly difficult and complicated" problem involving unauthorized financial institutions, which are often used for laundering money obtained through corruption, online gambling and fraud by unscrupulous persons.
The government has been trying to tighten capital control to prevent the downward pressure of the value of the yuan and stop money flooding out of China.
In August last year, the central bank changed the mechanism for setting its exchange rate and has intervened in onshore and offshore foreign exchange markets to support the value of the yuan.
Since April, the Chinese police have cracked down on about 170 cases involving illegal fund transfers and money laundering.
The report said that the operation was undertaken by police in cooperation with the central bank and the foreign exchange regulator.
