GGRAsia – Macau police disrupt UnionPay scam in casino

Macau police disrupt UnionPay scam in casino

Jan 29, 2015 Newsdesk Latest News, Macau, Top of the deck

The Macau police arrested four people for allegedly using misregistered China UnionPay terminals to allow mainland Chinese gamblers to move funds to Macau.

The detentions came after the case was reported by the management of a Cotai casino where the suspects were allegedly operating, the police said. The police did not name the property, reports Macau-based newspaper Jornal Tribuna de Macau.

Mainland visitors are only allowed to take a daily limit of RMB20,000 (US$3,202) out of mainland China in cash. Gamblers however routinely get around this by purchasing items from one of Macau’s pawnshops or jewellery stores using their UnionPay cards, then immediately returning the items in exchange for cash – a transaction that is not illegal. But it is illegal to use misregistered terminals to facilitate such a process.

The value of the transactions allegedly processed by the suspects amounted to at least MOP139.9 million (US$17.5 million) over a nine-month period, according to preliminary investigations.

One of the suspects was responsible for finding potential ‘customers’ at the casino floor. The ‘clients’ would be taken to a hotel room, where the transaction would take place, according to Jornal Tribuna de Macau.

The police reportedly found four UnionPay card swipe devices in the hotel room. The devices had been tampered with so that the UnionPay network identified them as being registered and operated in mainland China, where transaction fees charged by the China UnionPay system are much lower than in Macau.

UnionPay International Co Ltd, a subsidiary focusing on transactions outside the borders of mainland China, including Macau, missed out on MOP258,000 in transaction fees for the deals allegedly done by the suspects, the police said.

The Sunday Morning Post newspaper reported on January 18 that Ministry of Public Security officials from the mainland were to meet Macau regulators and bankers in order to start live electronic monitoring of cash transfers made to and from the territory via the China UnionPay system. The media outlet linked the move to mainland China’s ongoing anti-corruption campaign.

But finance house Credit Suisse AG commented in a note the following day: “We think the news may be overblown.” The bank said mainland China was already monitoring transactions as part of the Chinese banking system’s anti-money laundering procedures.