There is frequent travel between the two places and a strong demand for cross-border remittances. Many people choose to remit money to the mainland through money changers for convenience or more favorable exchange rates. However, over the years, some people have fallen into the trap of turning "white money" into "black money", and this situation still occurs today. Mr. Deng, a Hong Konger, went north to treat his injuries and transferred HK$70,000 to an account in the Mainland for medical and living expenses through a money exchange. However, a few months later, because his account received "black money" from a fraud case, he was detained in a detention center for 28 days by the police on suspicion of concealing and hiding the proceeds of crime. He described life in the detention centre as difficult. Fortunately, he was eventually proven innocent and released. However, he had to refund the money to the victims of the scam. After returning to Hong Kong, the money changer only compensated him for half of his losses.
Mr. Deng was very angry about the innocent victims of the disaster. He hoped to use his own painful experience to remind Hong Kong people to be careful of the traps of irregular money transfers in money changers, and not to lose the big picture for the small. "I am a victim. I know that every day in there (detention center) is like a year. I hope that no one else will be like me and be arrested and imprisoned unjustly."
Mr. Deng exchanged two sums of HK$49,500 and HK$20,000 for medical expenses into RMB 46,530 and RMB 18,800 respectively through a money changer in Prince Edward, and transferred the money to his bank account in the Mainland.
The victim, Mr. Deng, accidentally fell while working in 2023, landing on his buttocks, fractured the L4 lumbar vertebrae and compressed the nerves. He received treatment in Hong Kong for about a year and has not yet fully recovered. However, medical costs in Hong Kong are high and he is worried that the compensation for injury will not be enough to cover long-term treatment, so he plans to go to Foshan for treatment.
Money changers offer more favorable exchange rates to attract victims to remit money back to the mainland
In December 2024, he found a money changer in Prince Edward and discovered that the exchange rate between Hong Kong dollars and RMB was more favorable than that of the bank. He then converted two medical expenses of HK$49,500 and HK$20,000 respectively into RMB 46,530 and RMB 18,800, and transferred the money to a bank account in the Mainland. At that time, he checked the account transfer records and found that the transfer was not made by the company under the name of the money changer, but by the accounts of two different companies (a technology company and a rental company). He felt strange and inquired with the money changer. The store explained that it had a cooperative relationship with the two companies. Seeing that the money had been deposited into the account, Mr. Deng did not investigate further.
Mr. Deng’s bank account was suddenly frozen, the amount he could withdraw was zero, and the account was also shown as “frozen for receipt only, no payment”.
The frozen account was unsealed and the victim thought he was cleared of suspicion
After returning to the mainland, he withdrew some RMB for medical and living expenses. But in early January, his bank account was suddenly frozen. He immediately contacted the money changer, bank and public security bureau for information. The police explained that it was "black money" from a fraud case and froze the account. The bank said it might be unblocked in two days. The money changer reminded Deng that he did not need to refund anyone. If the court ruled that it involved fraud, the funds in the account would be automatically deducted. Deng would then hand over the court judgment to the money changer for follow-up. "(The police) said I was involved in fraud, but it has nothing to do with me. I used real money, clean money. (The money changer) is killing me."
Deng was worried that his account would be frozen indefinitely and he would not be able to use electronic payment methods such as Alipay and WeChat, which would affect his medical treatment and life in China. He was very concerned. As a result, his account was unblocked two days later. He thought that he was not suspected after investigation, so he withdrew the remaining funds in full and later destroyed the two remittance notices from the money changer.
A few months later, he was taken to the police station to record his statement, which turned into judicial detention.
It was not until mid-March that three police officers suddenly came to my door, showed their credentials, and asked Deng to go to the police station to record his statement. "I thought they were not treating me as a suspect at the time, but as a victim. They did not handcuff me." However, after he arrived at the police station, he was detained in the detention center for 24 hours for investigation. After preliminary investigation, he was detained on suspicion of concealing the proceeds of crime. The police explained that the sum of 46,530 yuan belonged to the assets of a fraud victim who had reported the case. Another sum of $18,800 was also believed to be black money, but the victim did not report the case to the police. He will spend the next 28 days in the detention center.
Mr. Deng was detained by the judiciary on suspicion of concealing and hiding the proceeds of crime.
Life in the detention center was not easy. Deng had to share a room with other detainees. Due to the lack of space, he used the floor as his bed, but due to his back problems, he did not sleep well. The food was also difficult to swallow, mostly steamed buns, eggs, and boiled cabbage. On the fourth day, he fainted and was sent to the medical room for an IV drip. After staying there for 28 days, his physical condition deteriorated significantly and his skin developed rashes, suspected to be due to hygiene issues.
What worries him most is not knowing when he will be released and see the light of day again. "I heard from some prisoners that they were sentenced to nine months in prison for stealing a mobile phone for 8,000 dollars. If I get a few tens of thousands of dollars, I will be sentenced to at least three years in prison. I am very nervous and scared. I can't go out and I can't eat."
The wife obtained a copy of the remittance slip to prove her innocence and was finally released
Fortunately, after being reminded by the police officer in charge of the interrogation, Deng’s wife successfully obtained a copy of the remittance notice from the money changer involved, proving Deng’s innocence. The detention center then issued a release certificate, stating that during the investigation, it was found that the suspect (Mr. Deng) should not be held criminally responsible. At the same time, Deng was required to mediate with the victim of the fraud at the police station. Deng returned RMB 46,530 in stolen money to the victim in cash and signed an agreement that both parties would no longer pursue each other.
Mr. Deng must mediate with the victim of the fraud at the police station, return the stolen money of RMB 46,530 to the victim in cash, and sign an agreement that both parties will no longer pursue each other.
The public security criminal investigation has come to an end. The frightened Deng did not dare to stay in the mainland for long and hurried back to Hong Kong, but the psychological trauma is hard to erase. "Anyway, I'm very scared. Now I'm back in Hong Kong. I have a biological clock every day. I have to wake up at 7 o'clock (in the detention center)... I have nightmares every day. It seems so unreal. I'm in prison and can't get out."
Deng said that he later argued with the money changer, and the other party was willing to pay half of the loss, but Deng could not pursue it further. He was worried that if he refused, he would not even get half, so he agreed to take the money and signed the agreement. He lamented that he was a victim but lost a large sum of money in vain. He was still unwilling to accept the loss and had sought help from the Customs and Police. He also tried to recover the remaining amount, but the lawyer hired by the money changer refused his request on the grounds that both parties had reached an agreement.
After receiving half of the payment from the money changer, Mr. Deng tried to recover the remaining amount, but the lawyer hired by the money changer refused his request on the grounds that both parties had reached an agreement.
Citizens are urged to keep money changer remittance slips and to remit money in formal ways
He admitted that he had seen many similar cases online, where many victims were unable to get their hard-earned money back, and even won the case in the Small Claims Tribunal. However, the money exchange shops could still avoid compensation by claiming that they had gone bankrupt. He sought legal advice and was told that he would be lucky to receive half of the compensation. He has given up the idea of pursuing the claim further, but hopes to use his own experience to call on citizens to remit money in a formal way, such as cross-border cash, bank transfer, etc. Even if the money must be transferred through a money changer, if the payment account is found to be suspicious, the police should be called and the customs should be notified as soon as possible, and records such as the remittance notice and report form should be kept. "You keep these things, and when the police come to find you, you show these things, and most of the time there should be nothing wrong, but because I couldn't show them, I became a scapegoat."
Chen Shengnan, partner of Guangdong Xingchen Law Firm, explained that as long as it can be proved that the funds came from personal remittances, the police will release the suspects even if the remittance channel is not very compliant. As to whether it is necessary to negotiate and compensate the victims of the scam in exchange for personal freedom and freedom of entry and exit, Chen said that negotiation is voluntary and even refusal will not affect personal freedom. He also mentioned that, generally speaking, mainland police rarely detain Hong Kong people who receive payments, except in two situations.
Customs said that it is currently following up on the above report.
Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (the Ordinance), any person operating remittance and/or currency exchange services must obtain a licence issued by the Commissioner of Customs and Excise. Customs is responsible for supervising the compliance of licensed money service operators, including whether they fulfill their customer due diligence and record keeping obligations, comply with other provisions of the Ordinance and licence conditions, etc. Customs conducts regular or surprise inspections to check whether money service operators operate in accordance with the licensing guidelines, including proper handling of customer funds and other licensing requirements. If any violation of the Regulations is found, Customs will take appropriate enforcement actions. In addition to criminal sanctions, violators may also face disciplinary and/or administrative sanctions.
If the account is frozen continuously and the money changer fails to handle the matter properly, the license may be revoked.
If a money service operator is found to have arranged remittances that have resulted in the receiving account being frozen by the Mainland authorities, the Customs will impose specific licensing conditions on it, requiring it to strengthen the security of its remittance channels. If the situation persists and the money service operator fails to properly handle consumers' requests for assistance, its licence may be suspended or revoked.
The Ordinance prohibits unlicensed remittance or currency exchange operations. Violators may be fined up to HK$1 million and imprisoned for up to two years upon conviction.
Customs prosecuted 31 cases of violating licensing regulations since last year
Customs is committed to combating unlicensed money service operators. In the first quarter of 2024-2025, Customs successfully prosecuted 14 unlicensed money service operators. The persons involved were fined ranging from HK$2,000 to HK$36,000. At the same time, Customs successfully prosecuted a total of 7 cases involving money service operators violating customer due diligence and record keeping requirements. The persons involved were fined ranging from $3,000 to $188,000. As for cases of violation of the licence application or licensing regulations, Customs successfully prosecuted 31 cases and the persons involved were fined ranging from $1,000 to $266,600.
Customs reminds consumers to patronize licensed money service operators. When choosing a remittance service, you need to consider whether some overly favorable exchange rates hide risks, and keep transaction documents and related records.
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