The Hong Kong District Court rejected Xiao Rui’s claim that part of his money came from selling Bitcoin, finding him guilty of laundering more than HK$64 million through secret banking channels.
The 37-year-old son of a former anti-corruption official from Wuhan faces sentencing on July 23 after being found guilty of four counts of money laundering and one count of using a forged document.
The defense of the fake BTC sale was rejected
Between March 2014 and November 2023, about 38 transactions totaling more than HK$64 million flowed into Xiao Rui’s personal bank accounts. The money came from at least 12 companies and 12 individuals. None of them had any business relationships with Xiao Asset Management, but he told the court that some of the money in his Hong Kong bank accounts came from selling bitcoin.
Acting Judge Bernard Chung said Xiao could not provide any basic records such as transaction dates, reference numbers or wallet addresses to prove his claim. The judge found this explanation weak and rejected it outright.
Xiao too He claimed That the money was a gift from his mother. According to him, she earned money through her work and gave it to him to invest in Hong Kong. However, during questioning, Xiao said that his mother worked as a nurse before moving into administrative positions. He claimed she received a HK$20 million cash bonus from an electricity company in 2016, but the judge said that story did not fit her employment history.
The court heard that a contractor named Yao Qian, who underwrote a municipal water pump project in Wuhan, deposited about HK$4.72 million into Xiao’s bank account. Xiao Rui’s father, Xiao Jun, is said to have helped conclude this contract when he headed an office in the Wuhan People’s Procuratorate. Notably, the elder Xiao was previously suspended from duty amid a corruption investigation on the mainland.
The judge found the contractor’s testimony believable and rejected the defense’s claim that the funds were legitimate business income.
How did Xiao obtain Hong Kong residency with forged documents?
The case It also includes fraud related to Xiao Rui’s stay in Hong Kong. In 2013, he applied to live in Hong Kong through the Capital Investment Programme. This program requires applicants to prove that they have assets of more than HK$10 million. Xiao provided false certificates of deposit from the China Construction Bank branch in Wuhan.
Bank employees later confirmed that the accounts did not exist. Despite this, Xiao’s residency was approved in 2014, and in the same year, he used his HSBC account to purchase two investment fund products worth HK$10 million in order to meet the scheme’s investment requirements.
The court convicted Xiao of using forged documents for this application, and he claimed that he was not aware of the fact that the documents were forged because his mother was the one who handled the application. The judge did not accept this excuse.
Prosecutors said the Money laundering It happened over the course of nearly a decade. Xiao used accounts at Standard Chartered, DBS and HSBC to move money through what the court called secret banking channels.
The Independent Anti-Corruption Commission (ICAC). he asked To take the proceeds of crime from Xiao, but a date for that hearing has not yet been set.
Xiao will remain in custody until his sentencing, where he faces up to a prison sentence Money laundering chargeswhich carries a penalty of up to 14 years in Hong Kong.
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