14-year-old Hong Konger among four arrested for defrauding crypto owners with counterfeit banknotes

Chief Inspector Lo Yuen-shan of the police’s economic crimes bureau said on Sunday that the four suspects brought the number of people arrested in connection with such cases since October last year to 14.

Lo said the four people, aged between 14 and 39, were arrested on Friday on suspicion of conspiracy to commit fraud and possession and use of 5,000 counterfeit banknotes.

Chief Inspector Mak Wai-kwong also warned young residents against turning to crime in search of quick money.

“Young people have time off during the summer holidays and should be aware of the danger of being recruited for scams,” he said.

According to the police, the four suspects worked as a syndicate and their tasks were clearly divided.

Two of them were masterminds responsible for obtaining counterfeit banknotes and premises to use as fake cryptocurrency exchange offices, and who also searched for victims online.

The other two suspects retrieved the banknotes from a small warehouse in Mong Kok, while the masterminds disguised a nearby site as a legitimate business.

Lo said the pair behind the scheme posed as well-known cryptocurrency investors to lure people with offers above the current market price of virtual currencies.

They then invited the victims into the store and showed them the stacks of counterfeit banknotes to prove to them that they could easily complete the transaction without having to hand over cash.

“The suspects did not allow the victims to untie the stack of HK$1,000 banknotes because only the top and bottom ones were genuine,” she said.

After gaining the victims’ trust, the suspects convinced them to conduct the transactions online.

After the cryptocurrency was transferred, the suspects immediately withdrew the assets from the account and refused to pay.

Lo said the tactic had been common in recent cases. The quartet and others are suspected of defrauding 12 victims of HK$11 million between October last year and Friday.

Inspector Mak called for increased vigilance and said citizens could check the banknotes for authenticity by looking at the shimmering patterns.

The maximum penalty for producing, circulating or distributing counterfeit banknotes in Hong Kong is 14 years in prison.