“The investigation suggested the men sold part of the precious metal to several trading firms and jewellery companies to cash in HK$2.21 billion,” he said. Officers are tracking the remaining amount of precious metal.

The 48-year-old man, who lives in a Kwai Chung public housing flat, worked as an electrical technician with a monthly salary of HK$20,000. He was also the sole proprietor of a shell company which set up two bank accounts in July last year.

The younger man was a local worker and earned about HK$10,000 a month. He was authorised by another shell company to handle its bank account.

Of the HK$2.21 billion, HK$1.61 billion was transferred into the three bank accounts in 2020 and 2021, while the remaining HK$600 million was transferred into other bank accounts.

Another HK$1.29 billion was transferred into the three bank accounts of the two shell companies.

Superintendent Yeung Yuk-man of the bureau said the two bank accounts belonging to the older man’s company had received HK$1.7 billion in 240 transactions between July and November last year. The biggest amount of money in a single transaction was HK$28 million.

He said the bank account of the 30-year-old man processed HK$1.2 billion in about 300 transactions between January and August in 2020, adding that funds deposited were then taken out again on the same day or within a short period. Yeung said this was a traditional tactic of money laundering.

“The frequent transactions involving large sums of money their bank accounts handled was incommensurate with the financial status of the two men and the purported businesses of their companies,” Senior Superintendent Rita Li Yim-ping, head of the bureau, said.

After gathering evidence, customs officers arrested the two suspects last Friday and seized computers, bank statements and related documents in their flats in Kwai Chung and Ma On Shan.

Officers also froze HK$248,000 in the three bank accounts, which was linked to the proceeds of the crime.

The two men, accused of receiving HK$3.5 billion in suspected crime proceeds between January 2020 and mid-2022, were detained over money laundering – an offence that is punishable by up to 14 years in jail.

The investigation indicated the HK$3.5 billion had been transferred into more than 100 bank accounts in Hong Kong, mainland China and overseas. Half of the accounts belonged to more than 50 shell companies in the city.

Senior Superintendent Li said it was customs’ largest-ever money-laundering case in terms of the financial amount and the value of precious metal involved.

“Criminals manipulated the trading of precious metal to create extra layers of transactions to conceal the origins and flow of the proceeds of crime,” she said.

Li added authorities were investigating the origins of the 8.4 tonnes of precious metal, the final destinations of the illegal funds and the types of activities that had generated the illicit money.

She said customs would continue to maintain close liaison with mainland and overseas law enforcement agencies, as well as related parties such as banks, to combat money-laundering activities and spare no effort to bring criminals to justice.

The two suspects have been released on bail, pending further investigation. According to the department, more arrests are possible.

In the first 10 months of this year, customs officers solved nine money-laundering cases, including the current one, totalling HK$5.2 billion in suspected crime proceeds. There were 12 cases involving HK$4.4 billion in the whole of last year and nine cases amounting to HK$4.6 billion in 2020.

The city’s largest ­money-laundering case – involving HK$13.1 billion – came to light in 2012 when police arrested a 22-year-old man from the mainland. Between August 2009 and April 2010, the man laundered the money by making 4,800 deposits to his bank accounts. He was sentenced to 10½ years in jail in January 2013.

In June this year, the Hong Kong government published in its gazette the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill that seeks to introduce a licensing regime for virtual asset service providers, and a registration regime for dealers in precious metals and stones to impose statutory anti-money laundering and counter-terrorist financing obligation on the two sectors. The bill has been introduced into the Legislative Council.

Banks, securities and insurance firms, legal and accounting professionals and property agents in Hong Kong are required to report any suspicious transactions.

In the first nine months of this year, the Joint Financial Intelligence Unit, comprising both police and customs officers, handled 51,199 reports of suspicious financial activity. Figures from the unit showed reports of such activity dropped from 92,115 in 2017 to 56,912 in 2021.