29 arrested in crackdown on loan sharks who charged victims 3,000% in interest
Hong Kong police have arrested 29 people in a crackdown on a loan-sharking and money‑laundering ring that charged victims annual interest rates as high as 3,000 per cent. Police said on Wednesday that the syndicate had set up a secret call centre in Tsuen Wan and posed as licensed finance companies,
By Danny Mok
Hong Kong police have arrested 29 people in a crackdown on a loan-sharking and money‑laundering ring that charged victims annual interest rates as high as 3,000 per cent.
Police said on Wednesday that the syndicate had set up a secret call centre in Tsuen Wan and posed as licensed finance companies, randomly phoning people in an attempt to lure them into borrowing money.
In the process, they extracted personal information, including occupations, repayment ability and family background.
Small loans were initially offered but quickly ballooned as victims were hit with excessive handling fees and interest charges of 25 to 50 per cent within just four to seven days, resulting in effective annual rates soaring to between 450 and 3,000 per cent.
When victims were unable to repay, they were forced to take out new loans to cover existing debts.
The syndicate then escalated its tactics, offering bogus debt-restructuring plans, inflicting further harm on victims and their relatives.
To enforce repayments, the group recruited teenagers as young as 14 to intimidate victims, including splashing red paint on homes and businesses.
At least six such cases were linked to the syndicate, with several secondary school students among those arrested, investigators said.
The criminal proceeds were funnelled to a family‑run money‑laundering ring operating from flats and nearby industrial units.
At its core were twin siblings, assisted by their father and elder brother, who managed stooge bank accounts opened by people lured with offers of HK$10,000 to HK$15,000.
The ring processed between HK$1 million and HK$2 million in illicit withdrawals each month, sometimes using cryptocurrency to conceal the flow of funds.
Police said they seized HK$300,000 in cash during the operation.
Seventeen male and 12 female suspects, aged 14 to 70, were arrested on suspicion of illegal lending, fraud, money laundering and criminal damage.
In Hong Kong, the statutory maximum interest rate for money-lender loans is 48 per cent per annum. Loans with interest rates above 36 per cent – but below 48 per cent – per annum are presumed to be extortionate and can be challenged in court.