Recently, a digital bank in Hong Kong discovered that fraudsters were using a new method to bypass the bank's facial recognition system, thereby manipulating accounts and exposing security vulnerabilities in the system. Following a report from the banking sector, the police launched an investigation and found that a cross-border crime syndicate was recruiting residents from the Mainland to open dummy accounts. They recorded "dynamic facial" videos in advance, which accomplices in the Mainland used along with account information to remotely control these dummy accounts for money laundering. As a result, the Hong Kong police, in collaboration with Shenzhen police, arrested three individuals involved in manipulating a total of 184 dummy accounts across six banks, laundering approximately HK$274 million in suspected criminal proceeds. The police and the Monetary Authority immediately issued a warning to the banking sector, urging the implementation of multiple new detection measures to seal security gaps and prevent illegal activities.
Currently, the mobile applications of digital banks require real-time dynamic facial recognition for account access. Users must perform actions like shaking their heads and blinking to verify they are real people.
Account Creators Filmed for Accomplices
Yesterday (Oct. 16), the police announced that a criminal group had breached this security protocol. The group first recruited residents from the Mainland to come to Hong Kong, using their personal information to open dummy accounts at a digital bank. After that, they requested account holders to film dynamic facial videos, which were then passed to accomplices in the Mainland to facilitate the manipulation of these dummy accounts for money laundering.
When the bank's mobile application required facial recognition for identity verification, members of the group used the pre-recorded videos for facial recognition. Then they manipulated the accounts to transfer criminal proceeds.
It is understood that the criminal group recruited mainland individuals to open multiple dummy accounts for rewards ranging from HK$300 to HK$1,000.
Suspects Resided in Hotel Room; Police Seized Five Phones
On Oct. 14 and 15, the police from both Hong Kong and Shenzhen conducted a joint operation. The Hong Kong police arrested a local man, surnamed Lo (32 years old), on suspicion of conspiracy to launder money, believing he was involved in recruiting mainland residents to come to Hong Kong and arrange for them to open bank accounts at the digital bank via the internet. The police seized five phones from the suspect's hotel room, discovering multiple suspected selfies of dummy account holders on the devices. The arrested man also reportedly utilized 16 bank accounts he controlled to launder HK$54 million in suspected criminal proceeds from January to July of this year. He has been provisionally charged with three counts of money laundering and has appeared in the Eastern Magistrates' Court.
With real-time intelligence sharing, mainland authorities also conducted simultaneous arrest actions in Shenzhen, apprehending two mainland residents aged 41 and 43 on money laundering charges in two residential units, seizing three mobile phones believed to be involved in manipulating the dummy accounts.
The police believe that the criminal group has repeatedly assisted and incited mainland residents to open accounts and hand them over for laundering criminal proceeds. From December last year to August this year, they laundered a total of HK$274 million, including over HK$47 million from 337 fraud cases both local and overseas. The largest loss involved an online romance and investment scam, where a senior businesswoman was defrauded of HK$11 million over a period of three to five months.
The police indicated that this operation demonstrates the close cooperation between the two police forces and their determination to combat cross-border money laundering. In the future, both sides will continue to strengthen intelligence exchange and law enforcement collaboration to ensure the security of Hong Kong's financial system. Tackling money laundering is one of the top priorities for the police department, and they will continue to communicate closely with other countries and regions, enhance cooperation, and deploy joint efforts to combat various types of cross-border money laundering crimes.
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