TOKYO (TR) – Tokyo Metropolitan Police have arrested two Chinese nationals for allegedly operating an illegal underground bank out of a Shinjuku Ward high-rise.
Police say the operation run by Zeng Cong, a 26-year-old vocational school student residing in Toshima Ward, and Lin Ziqiang, a 24-year-old unemployed resident of Nakano Ward, was used to launder money for rings specializing in tokushu sagi (specialized fraud), reports NHK (June 17).
The suspects are accused of violating the Banking Act by conducting unauthorized foreign exchange transactions between June and December of last year.
Police have not disclosed whether the two suspects have admitted to the charges.
According to police, the pair solicited clients — primarily Chinese exchange students — through social media and word-of-mouth.
In one confirmed instance, the suspects received a transfer of Chinese yuan via an electronic payment service from a client. In return, they handed over approximately 1.2 million yen in cash inside a room of a luxury apartment in Shinjuku.
Investigators believe the unauthorized exchange was part of a larger money-laundering scheme for specialized fraud rings, whose members pose as persons of authority over the telephone in swindling victims out of cash.
Police suspect the Japanese yen distributed to the students was sourced directly from an ukeko (cash receiver) and dashiko (cash withdrawer) working for a specialized fraud syndicate.
By trading the fraudulently obtained yen for digital yuan, the group effectively washed the dirty money.
Police are continuing its investigation to uncover the full extent of the network’s money-laundering activities.
