Police Bust Major Crime Ring for FX Smuggling

Police said yesterday that they busted an organized crime ring that smuggled 950 billion won (732 million U.S. dollars) out of the country.

Seoul customs authorities announced the arrest of 10 suspects who arranged for companies trading with China and Korean-Chinese residents in Korea to conduct illegal foreign currency transactions over the past three years using some 230 borrowed-name accounts.

The suspects are alleged to have illegally wired money to China in cooperation with a Chinese crime organization.

With bank accounts both in Korea and China, they withdrew cash deposited in Korea for cheap transaction fees. This practice has been banned under foreign currency law for fear of illegal transfers of cash and overseas smuggling of funds.

“They are also charged with illegally wiring funds worth 20 million dollars in the form of payments for product purchase,” said a customs official. “This is the first time we have busted a crime ring that illegally wired (close to) one trillion won (770 million dollars) abroad.”

The investigation is targeting 20 domestic importers and exporters that have traded foreign currencies using the ring’s bank accounts, and will also seek to identify similar crime syndicates.

ceric@donga.com