Cops investigating links between serious crime, illegal remittance providers

KUCHING: The police are investigating the links between illegal remittance service operators in the country and other serious crimes such as illegal gambling and fraud, says Deputy Inspector-General of Police Datuk Seri Ayob Khan Mydin Pitchay.

He said the police were in the process of analysing cash transactions and suspicious financial transactions involving 39 bank accounts with funds totalling RM47 million from 2021 to 2023.

"This is because the role of the (illegal remittance service) operator may be driven as a facilitator in assisting with other illegal activities through the movement of funds," he said in a press conference at the Sarawak Contingent Police Headquarters here on Wednesday (Nov 29).

He said the illegal transfer of money abroad had increased the size of the shadow economy, which was estimated at around 18 per cent of the total Gross Domestic Product, or RM275bil.

"Among the financial crime activities detected contributing to the shadow economy are trade mispricing, overseas funds transfers through illegal channels and symptoms of corruption," he said.

Meanwhile, Ayob Khan said such illegal remittance services in Sarawak were detected operating behind legitimate businesses such as retail and telecommunications shops to evade the authorities.

He said the police in collaboration with Bank Negara Malaysia (BNM) had conducted a special operation against the unlicensed business operators yesterday, with a total of eight premises in several areas in the state being raided and 17 local citizens arrested to assist in the investigation.

There was also about RM1mil and 1.1mil Indonesian Rupiah (RM332) in cash seized during the raid.

"This remittance activity involves destinations like Indonesia, Bangladesh, Myanmar and the Philippines so it involves foreign workers, probably because they have no documents and cannot open a bank account. However, that is not a reason for them to use remittance services without a licence," he said, adding that such premises operated in areas with a high number of foreign workers.

Ayob Khan said the remittance service operators in question were being investigated under Section 4(1) of the Money Services Business Act 2011 and could also be involved in money laundering activities which is an offence under Section 4(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

"We will hold more raids after this. There may also be some (illegal) premises that have something to do with syndicates and some that use a similar concept as the 'hawala' system (foreign money transfer via a network of brokers). This is a warning to all other illegal financial services operators to stop such unlicensed operations," he said. - Bernama

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