In typical email fraud cases, victims can rarely trace their funds to ‘first layer’ bank account(s) where they were initially persuaded by fraudsters to transfer their money. Usually, by the time fraud is discovered, the funds are long gone; or transferred onwards to second, third or even fourth-layer recipients, who may well be innocent third parties with no involvement or even knowledge of the underlying illicit act.
Additional complexity arises when “underground banking” is involved in asset tracing and fraud recovery.
“Underground banking” in this context is commonly known as a method of transferring funds out of a place to circumvent its foreign exchange control regulations – by transferring a foreign currency to a third party in that country, and in return receiving an equivalent sum at an agreed exchange rate in other currencies.
The approach of Hong Kong courts to this aspect has changed in recent years.