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Investigating the Grey Areas of the Chinese Communities in Southeast Asia

Arnaud Leveau

The Papers

Triads: From street level to transnational crime

Peter Michael

Texte intégral

1From the neon-lit streets in the heart of triad territory in Hong Kong and China’s ganglands dominating the sex, extortion and drug trade; to counterfeiting luxury goods straight off the shelves of the Parisian fashion houses of Louis Vuitton, Pierre Cardin and Chanel; right down to hired assassins, the illegal shark fin trade and clandestine methamphetamine factories on the tropical island paradise of Fiji, they are everywhere.

2They run casino loansharking and operate multi-billion dollar blackmarket horse-racing and illegal soccer betting rackets across Asia.

3They are key players in the global business of people smuggling and money laundering with secret underground routes criss-crossing China, Eastern Europe and the Middle East into the popular destinations of the EU, UK and the US.

4They have been identified meddling in the blackmarket arms trade and financing terror and piracy networks with links to the Stalinist state of North Korea, the outlawed terrorist organisations of Al-Qaeda, Abu Sayyaf and Jemaah Islamiah.

5And, of course, it is important not to forget their core business which is shipping tonnes of highly-addictive illicit party drugs such as ice, ecstasy and speed – as well as the more hard-core crack, mandrax and heroin-into dance clubs and drug dens across the world in capital cities like Sydney, Toronto, New York and Durban.

6But the face of the modern triad is changing.

7This paper will cover some of the latest trends, activities and personalities of one of the most powerful and ruthless criminal networks on the planet, known as the Triad or “black society”.

8Based on personal investigations, observations and interviews with senior organised crime and anti-triad experts, intelligence operatives and underworld sources, this document draws on a number of my news articles written over the past two years while working as the senior investigative reporter for Hong Kong’s leading English daily the South China Morning Post.

9These reports also include rare insight into the machinations of the changing face of triads through off-the-record conversations with several high-ranking triad officials.

10This access was granted only after a series of meetings in the lobby of a five star hotel – and later in such venues as a karaoke bar and corporate boardroom – and always on the proviso of unnamed sources.

11Such encounters reinforced the low-profile image that the triad bosses – or dragonheads – are seeking to encourage and foster.

12Many of the major triad organisations – including 14K, Sun Yee On and Wo Shing Wo – started investing in property and a wide-ranging portfolio of legitimate businesses as a means of creating an impenetrable money trail in the early 1980s.

13And while the footsoldiers and sergeants-at-arms are more easily distinguishable on the streets of Mong Kok, Yau Ma Tei and Tsim Sha Tsui for their died blonde/red hair, flashy jewellery, aggressive posturing and hotted-up cars, this is not the case with the leaders and decision makers of the modern triad.

14Most of the crime lords seek a low profile and claim to be “simply businessmen”.

15They present themselves as urbane, multi-lingual, sociable and well-travelled individuals.

16But behind this facade these are ruthless and dangerous men capable of mobilising large groups of committed and willing street thugs and smaller cadres of well-trained and blooded assassins.

17Offers to join them on their personal luxury yacht for a cruise around Hong Kong harbour or on a Ferrari club “cannonball rally” run up to the 2004 Shanghai Grand Prix were politely declined for obvious reasons.

18Certainly it is true that the lines of triad allegiance are blurred. The long-harboured hatred and enmity between various triad factions is no longer so distinct. These days it is money and connections that talk. And, in some cases, this power and influence can be traced to the very top of China’s political elite.

19Prior to the handover of the former British colony to China in 1997, a confidential police report suggested membership of the four main triads – Sun Yee On, Wo Shing Wo, 14K and Wo Hop Wo – boasted numbers of more than 30,000 each.

20The tally, the document asserts, excludes those of the fringes who have not undergone the initiation rites. This means that about three of every 100 residents aged over 15 are sworn members of the underworld.

21The top-secret report also claimed Chinese law enforcers had struck a deal with the triad bosses to ensure a smooth transition of law and order in the handover process.

22At a reception for a delegation of Hong Kong business figures on June 22, 1984, the late paramount leader Deng Xiaoping told his guests: “Hong Kong black societies are very powerful. They are even more powerful than their counterparts elsewhere. Of course, not all black societies are dark. There are many good guys among them.”

23My intention with this paper today is to provide a snapshot of the modern triad as evidenced in news events and police and intelligence operations that have surfaced on the public radar over the past two years.

24In keeping with the tempo of the rapidly evolving criminal diaspora of the modern triad, I would like to present the information (with minor style changes) as I originally wrote it-be it as a news article or colour feature - and including direct quotes from sources of the time.

25As mentioned earlier, we will start on the streets of Hong Kong, move across the border to Macau and mainland China, before, much like the ever-reaching tentacles of the criminal underworld, expanding to cover the transnational activities of triad organisations.

26To finish I will offer some profiles of several triad bosses, dragon-heads, red pole fighters, and other business-minded triad figures who have been caught and convicted and are currently serving time in prisons around the world.

Sex and the city

27Hong Kong is the heartland of the triad. Behind the space-age façade of gleaming skyrises, bustling harbour and the urban canyons of Asia’s World City, it is easy to find the shopfront of the modern-day gangsters.

28Emerge from the underground subway station onto the seedy streets of Mong Kong and you enter the twilight zone of triad territory. Here within a matter of a couple of hundred metres you can find the recruiting stations, training ground and economic pipeline of triad business.

29Housed in major shopping blocks and now, after an ongoing police crackdown, less visibly in the upper floors of office buildings, is room after room of hardcore pornography. Touts and junior triad associates stand on street corners and in the rooms directing customers to the best bargains.

30Everywhere you look, hard-core sex fills these rooms - thousands of pirated discs emblazoned with lurid images of naked men and women engaged in various sex acts. Most cost an average of $20 or six for $100.

31Some of the titles are equally eye-catching: Three For All, Lewd Conduct, Taste Of Love.

32Overhead a widescreen plasma television offers a sample of the wares. The volume is turned up loud, deafeningly so. The entire room reverberates to the sound of moaning, groaning and grunting. It's hard to imagine that anyone making that much noise is enjoying themselves.

33Next door it is the same. And the next one. The entire floor of these Mongkok buildings are dedicated to the sale of illegal pornography.

34Drifting through the rooms are dozens of mostly young men. Peak business is after work or at weekends, say the touts. Men stand in the doorway of each unit, offering to strike a deal. “You buy six and I will give you one for free,” says one tout. “But don't tell my boss. It is our secret.”

35"This is the shopfront of organised crime in the city," says Mongkok's assistant district commander (crime), Superintendent Dave Grant, an anti-triad veteran.

36The open sale of hard-core pornography had been a problem for more than 10 years but it was still "totally unacceptable", he says.

37"We know blackmail is out there, prostitution is out there, drugs are out there, but this thing (the issue of hardcore pornography) has been sitting there all this time as a mountain," said Superintendent Grant.

38Triads make $1.7 million a day out of hard-core pornography in the "most visible and tangible evidence" of organised crime activity in the city, investigations have revealed.

39The $6 billion-a-year industry is "highly lucrative" for the 14K and Wo Shing Wo triads, according to police.

40And it is being used to fund large-scale drug production and trafficking, people smuggling, prostitution and extortion rackets.

41Based on the latest official figures, this multi-billion dollar industry equates to about 17,000 customers a day each paying the going rate - about $100 for six discs - for pirated hard-core films in Mongkok's black market.

42Police have launched a "zero-tolerance crackdown" in the problem areas of shopping centres such as the Sino Centre, Ho King Commercial Centre and Sim City.

43More than 90 outlets have been raided on numerous occasions, with police having to weld doors shut to stop gangsters breaking into shops to reclaim seized goods.

44Police have arrested 123 people and seized 1.3 million discs since the start of 2004. But syndicate chiefs continue to elude capture through the use of "ghosts" or the names of drug addicts on leases.

45"Police have written to those purported landlords of the outlets concerned but to date less than 10 have come forward seeking to repossess their units," an official statement said. "This indicates ownership of many units is bogus."

46Police, legislators and justice department officials are pushing for laws to plug loopholes that allow triads to operate so freely.

47It is an offence to sell such material but sentences are usually a fine or short jail term.

48"This is the most visible and tangible evidence of organised criminal activity on the streets of Hong Kong," Superintendent Grant said.

49"And we cannot let that amount of organised crime and that amount of money flow freely to the triads. It is a mountain of a problem but we are determined to eradicate it."

50Another highly lucrative industry the triads dominate in Hong Kong is the sex trade and they are using increasingly sophisticated measures to make money out of the world’s oldest profession.

51Using the emerging phenomenon of “cyber-brothels”, they have even started advertising online prostitution services in English in an attempt to attract expatriate and foreign clients.

52Senior police sources say the move could be an attempt to market Hong Kong as a cheap destination for sex tourists.

53Several sex websites have been translated into English and offer thousands of women from Hong Kong, the mainland, Korea, Britain, and France for and average hourly rate of $350.

54One website operator, who refused to be identified, said triad bosses had turned to cyber-brothels for easy profits.

55He said the women paid a fee of several hundred dollars each to register with the website. They were then photographed and graded on their appearance, attitude, experience and services offered.

56Each link included a detailed map of how to find a prostitute’s apartment.

57“We only just started offering the service in English about three weeks ago,” said the operator. “This was more for the convenience of expats and overseas tourists… we did not want to be seen to be discriminating.”

58He said he believed the cyber-brothels were operating in a “grey area of the law” but they were more of a service to help sex workers find customers.

59It is not illegal for a sole prostitute to work in an apartment, but it is illegal to run a brothel or live off the earnings of a prostitute. The organisers of the online brothels offer many girls – but all operate out of their own apartments. The chief weapon against the trend is to check whether the women breach their tenancy agreements.

60The operations director of Mongkok police district, Chief Inspector Cheung Kim-Kwong, confirmed that the sex trade appeared to be moving away from the traditional brothel scenario.

61“This is an emerging phenomenon,” Chief Inspector Cheung Kim-Kwong said. “We cannot see why they would want to promote Hong Kong as a sex tourist destination… but it is a concern.”

62“We fear society is facing the problem where the prostitutes are moving into family environments to exploit the legal loophole of one-prostitute apartments.”

63Shoni, a 23-year-old prostitute working for the syndicates, says has sex with an average of seven men a day.

64“Some are nicer then others,” says the woman, who greets customers at the door of her tiny apartment wearing only a skimpy bikini.

65Shoni – not her real name – and the two girls next door on the same floor and the three on the floor below are the face of Hong Kong’s emerging cyber-brothel industry.

66Operating out of one-prostitute apartments, Shoni and hundreds like her are working for triad societies exploiting a legal loophole allowing operators to run an online brothel.

67She relies almost solely on the business generated by her appearance on a sex website. Charging a negotiable rate of about $400 for an hour, she offers massages, sex, “anything you want”. She keeps some of the money, but the rest goes to “them” – she refuses to say who her partners are or how much they get.

68Based on her hourly rate and an average of seven men a day – except on Sundays – Shoni makes more than $2,000 a day.

69Shoni agreed to be photographed but not identified. “They will get very angry.”

70Subsequent police investigations have found clear and direct links to triad societies.

'Drug supermarkets' above the law

71Triads are using dance and karaoke venues, many of which operate outside the law, to distribute illicit drugs such as ketamine - and police feel powerless to stop them, one of my investigations early last year revealed.

72Powerful triad bosses are operating a series of nightclub and karaoke bars like "drug supermarkets" - often beyond the reach of the law - where the widespread availability of the party drug ketamine is exposing Hong Kong youth to the risk of becoming a "lost generation", authorities confirm.

73Ketamine, also known as "Special K", is flooding across the border from the mainland in huge quantities and is being openly sold in bars and nightclubs across Hong Kong, the investigation revealed. Police say they are powerless to close down the venues - with some attracting crowds of up to 1,200 party-goers a night - or even to prevent them operating beyond the law without valid liquor or Place of Public Entertainment (PPE) licences.

74Senior police, triad experts, social researchers and young people have voiced growing concern over the alarming trend of the booming "Special K" phenomenon in Hong Kong.

75Ketamine comes in pill, powder or capsule form and is a tranquilliser used by vets to perform operations on animals.

76When taken by humans it can produce anything from numbness to a paralysing out-of-body experience.

77As part of the investigation, I visited several establishments in Tsim Sha Tsui and Mongkok to explore the scale of the drug problem and witnessed dealers selling packets of drugs and party-goers snorting white powder off the backs of their hands.

78Assistant Commissioner of Police Mike Dowie, said he had ordered a crackdown on the burgeoning ketamine trade.

79"The problem of psychotropic use of drugs by youngsters remains very high on the list of priorities of police concerns," he said.

80"The abuse and availability of ketamine in entertainment premises is now a major problem in Kowloon West.

81"And the amount of ketamine flooding on to the market is the focus of our efforts."

82He said police intelligence suggested a mixture of triad groups - including 14K and Sun Yee On - were "heavily engaged" in the sale of psychotropic drugs in entertainment centres.

83"Our concern is those clubs who have fallen foul of the law, who have lost their licences but who continue to operate unregulated, and seemingly beyond the reach of the law," he added.

84Another highly-ranking police source said many officers felt a huge sense of frustration because the triad-owned bars were operating like "drug supermarkets" and they were unable to close them down without the support of other government authorities.

85Owners of Club 348 in Nathan Road, Mongkok, one of the biggest nightclubs in Hong Kong and the target of an ongoing series of raids by police, welcomed the police crackdown yesterday.

86"We welcome them to work with us to clean up not only our club, but to also clean up drugs all over Hong Kong," said managing director Manuel Sequeira.

87"In the past we have been the subject of drug raids by the police and they have helped us clean up the place… the drug scene has been reduced phenomenally.

88"In no way does our club approve of the taking of drugs or participate in any selling of drugs."

89Mr Sequeira, who regularly packs in up to 600 party-goers on weekends, said he intended to stay within the law "as best as we can" and work with the police. He said he was unaware of any triad involvement in his club.

90Nowhere else in the world is ketamine, or 'Special K', used at such a high level, studies suggest.

91According to preliminary findings of the research, a staggering 95% of party-drug users in Hong Kong reported using ketamine, compared with 82% who take Ecstasy and 80% who smoke marijuana.

92At least 11 deaths have been linked to ketamine in Hong Kong, according to a police report.

93Experts believe the animal tranquilliser has soared in popularity in Hong Kong simply because the drug is so readily available across the border. China has five factories licensed to make and export ketamine - for medical use.

94Police sources say wholesale powdered ketamine is obtained relatively easily from legitimate manufacturers, but instead of ending up at veterinary clinics, they end up on Hong Kong streets.

95"Our intelligence points to mainland as the main source of ketamine," said Detective Senior Inspector Paul Lewis, of the Narcotics Bureau.

96The youngest offender involved in a trafficking case in the city was a 13-year-old, police said.

97Criminologist Chu Yiu-kong, author of Triads as Business, said triads had taken over the ketamine trade because its profitability.

98"If you look at the triads, there are not so many businesses left that they can do, protection rackets and smuggling have slowed down and CD piracy has slowed down. Now they have found the sale of ketamine is very profitable and that is why they are drawn to it," he said.

Cross-border cousins

99Triads are increasingly turning to cross-border activities to cash in on the demand for sex, drugs and contraband.

100Hong Kong’s three most powerful triads - Wo Shing Wo, 14K and Sun Yee On - are known to have forged alliances with prominent gangs in Macau and on the mainland.

101They are sharing skills, expertise and cash in return for a mutual flow of high-quality drugs, sex workers and counterfeit goods, senior police and analysts said.

102The comments followed a massive anti-triad crackdown, a seven-day operation involving unprecedented co-operation between law enforcement bodies in Macau, Guangdong and Hong Kong, in September last year.

103In Hong Kong alone, more than 1,500 suspected triad members or associates were arrested in 2,000 raids involving 6,000 officers.

104Officers said the joint operation, code-named Sun Rise, was a major success and had severely dented the financial pipeline that funds the criminal activities of triads.

105Chief Superintendent Stephen Fung Kin-man of the Organised Crime and Triad Bureau said cross-border co-operation was crucial to curbing many serious crimes involving triads.

106“Because of the close proximity of the three places, we have identified that some Hong Kong triads are operating in these other regions,” Mr Fung said.

107Intelligence-sharing between law enforcement agencies was opening up new leads for investigators trying to combat triad societies.

108He said triads were involved in protection rackets, vice activities, illegal gambling and bookmaking, dangerous drugs, pornographic and pirated optical discs, counterfeiting, contraband cigarettes and selling illegal, unmarked oil. Two key factors contributing to the increasing underworld trade are the emerging middle class on the mainland and the recently introduced individual travel permit system into Hong Kong.

109Mr Fung said police had observed a significant boom in the cross-border trafficking of sex workers. Some syndicates were recruiting people to work as prostitutes on the mainland and arranging their transfer to Hong Kong.

110Triads were also using on-line brothels to attract customers. They were leasing flats as reception centres where customers could choose girls from a selection of photos, he said, while the girls waited in another apartment.

111Chu Yiu-kong, a criminologist at the University of Hong Kong, said it was not unusual to find the underworld branching out in such a way.

112“Triads are not the only businesses turning to China. But from their point of view it is where they can get everything they want - drugs, girls, these sorts of things,” Dr Chu said.

113“It is a massive market and a resource-rich area … and people in China, too, want what they are offering.”

114But despite the massive dragnet no crime lords, or “dragonheads” - triad office bearers - were among the 1,569 people arrested, said Chief Superintendent Stephen Fung Kin-man of Hong Kong's Organised Crime and Triad Bureau.

115Mr Fung said the focus of the operation was to hit the triads' income.

116“Different tactics might have to be used in tackling the triad problem in Hong Kong and it all depends on our focus,” he said.

117“Our main focus was to attack their financial source and through this joint operation we wanted to deliver a strong signal to the triad and criminal fraternity.

118“At the end of it I think we have achieved our aims and the operation is considered to be very successful.”

119Backed by intelligence co-operation from Macau and Guangdong, officers raided more than 2,000 locations including discos, games centres, massage establishments and flats.

120They smashed 23 vice establishments, 18 gambling and six drug-smoking dens, and nine pirated disc centres, leading to the arrests of 802 men and 767 women.

121According to Mr Fung, triad societies in Hong Kong had evolved over the years into very loosely connected gangs.

122“They are not very organized - they don’t have central control-very much like gangsters.”

Cashing on the chinese love of gambling

123Triads dominate the underworld betting syndicates in Asia and are estimated to be taking more than $80 billion annually in horse racing alone.

124Illegal soccer gambling, too, is huge business for the triads. When Chelsea and Liverpool met for the showdown for a Champions League place on the last day of the 2004 English Premier League season, police swooped on a underground syndicate believed to be controlled by the Wo Hop To triad society arresting 16 suspects and seized $9 million which had been wagered on the game.

125Triads also offer loans to gambling-mad punters in Hong Kong and in the casinos in Macau – on exorbitant interest rates – and with ruthless and often deadly repercussions for those who are unable to pay up.

126Hong Kong police are calling for legislation to tackle loansharks to be fast-tracked following the death of a 23-year-old gambler who plunged 15 floors while trying to escape from two Macau casino debt collectors.

127The Law Reform Commission recommended that the government make harassment tactics used by debt collectors a criminal offence as part of a series of legal changes. The proposal is still under review.

128Ho Kin-wah, 23, died of multiple injuries after falling from the balcony of a Choi Wan Estate building in Wong Tai Sin.

129Ho was seen fighting and arguing with the two loansharks moments before he plunged from the high-rise.

130However, the case has not been listed as a murder investigation. The death was not suspicious, a police spokeswoman said.

131“No sign of other injuries or a defensive wound indicating a struggle with others was revealed in the post-mortem examination,” she said.

132Law Reform Commission chairman Stuart Stoker yesterday said the proposal to regulate the debt collection industry followed a public outcry over “a growing and real” problem.

133“This is something that is likely to get worse before it gets better,” he said.

134The incident involving Ho was the latest in a string of recent deaths linked to gambling and loanshark-related debt with four cases on one Saturday alone.

135Police are searching for the two Macau casino loansharks who accompanied Ho back to Hong Kong to try to get his $100,000 gambling debt from family members.

136Ho’s father, 50, told police the two men came to his Tse Wan Shan home on Sunday morning with his son and demanded $100,000.

137He refused and they left.

138The two men later took his son to the flat of another relative in Choi Wan Estate in Ngau Chi Wan in an attempt to extort the money.

139At about 11am, a resident in the apartment block reported hearing an argument and the sound of people running.

140The resident then said she heard a “big bang” and saw a man lying in a pool of blood in the courtyard below. The two other men escaped via the lift.

141In separate incidents, a man, 35, also of Choi Wan Estate in Ngau Chi Wan, was found hanged in his home by his younger sister after borrowing from a loanshark and incurring deepening gambling debts.

142A man, 40, was also found dead by his younger sister in Tseung Kwan O after inhaling charcoal smoke.

143His family told police they had already paid debt collectors $100,000 of the man’s gambling debt but still owed a further $100,000.

144Another man, 28, was found dead by staff in a Western District hotel, also after inhaling charcoal smoke.

145He was found with a suicide note saying he had taken his life over a debt-related problem from gambling.

146Police broke up one such loansharking syndicate run by members of three triad societies. It allegedly preyed on businessmen and charged annual interest rates of up to 430 per cent.

147Police said the gang was formed by members of three triad societies - Wo On Lok, 14K and Sun Yee On - and was also linked to loanshark syndicates in Macau.

148Acting Chief Superintendent Lo Mung-hung, of the Organised Crime and Triad Bureau, said the syndicate targeted businessmen from small and medium-sized firms, especially those in the manufacturing sector. “It is possible that members from the syndicate might have links with people from the manufacturing industry,” he said.

149Initial investigations revealed more than 200 debtors borrowed money from the syndicate and at least half of them were owners of small and medium enterprises.

150“The loans involved ranged from tens of thousands of dollars to $1 million. The total amount of loans reached $8 million a year and we estimated that their annual income was about $34 million,” Mr Lo said.

151He added the syndicate, which had been in operation for about two years, lent money to debtors at interest rates of up to 430 per cent a year. The highest legal rate is 60 per cent a year.

Not the real thing

152One field the triads are increasingly branching out into is counterfeiting.

153Exposing the tip of the iceberg, thirteen Hong Kong tourists were detained in Paris in January 2003 as part of a crackdown on a growing number of “tour group smugglers” buying up luxury goods in the French capital.

154The Hong Kong tour group was detained at Charles de Gaulle airport at the start of a 20-day tour of Europe. They apparently aroused suspicions among officers who believed they were operating as part of an organised syndicate buying luxury brands for gangs making fake goods.

155One of the travelers – who returned to Hong Kong after the detention – admitted paying just $2,000 to join the tour in return for buying luxury brand goods on behalf of a “trading company” sending goods to Japan. Although such schemes are in a grey area of the law, importing goods for the purpose of resale without declaring so and paying a duty constitutes smuggling in most countries.

156The 10 women and 3 men, aged between 30 and 45, were travelling with empty suitcases and had 60 credit cards between them. None of the group was charged with any offence.

157Global investigation agency Maxima Group, which specialises in brand protection for some of the world’s top fashion houses, said the phenomenon of “tour group smugglers” travelling out of Hong Kong has boomed in the past four years.

158“Demand is outstripping supply,” said operations director Lindsay Hudson, speaking from London. “It is very difficult to get hold of the latest imported styles from Europe, and they sell for three times the price on the streets of Hong Kong,” she said.

159“Some women would kill for the latest Birkin or Kelly handbag, and they will pay enormous amounts to get them.

160“There are also the counterfeiting gangs, many based in southern China, who are becoming increasingly sophisticated in copying these luxury products. But first they need the genuine article to copy.”

161The French luxury goods industry is renowned as the toughest in the world and is enforcing heavy fines as part of a crackdown to protect their brands against smugglers and counterfeiters.

162A spokesman for the Colbert Committee, which represents the interests of France’s leading fashion and luxury-goods houses, said they were “deeply concerned” by the black-market trade of luxury items. “Sometimes this kind of parallel traffic is organised,” said spokesman Nicolas Prelot.

163He said his members regularly confronted “tour groups” which were buying luxury brands such as Chanel, Hermes, Louis Vuitton, and Christian Dior in bulk. “Usually our members confront the buyers who are not buying for themselves but are buying in bulk to be sold back in Asia.”

164Hong Kong-based brand protection expert Tony Gurka, of Commercial Trademark Services, said “tour group smugglers” were a modern, sophisticated version of an old racket.

165“It is a very lucrative trade, and these sorts of groups could be doing as many as three trips a month,” he said. “Everything is pre-sold to retail outlets, they are only interested in genuine merchandise, they are usually surveillance-aware, and only shop in crowded places at peak times.”

166French anti-counterfeiting legislation was introduced in 1994, putting it in the same category as drugs and arms trafficking.

167The triads have also been found to be using counterfeiting to fund other activities.

168A counterfeiting racket operating through several front companies in Hong Kong and Asia is being investigated for allegedly funding Islamic terrorist organisations, a security expert revealed.

169David Fernyhough, head of Hong Kong-based risk management company Hill and Associates, said a probe into the leader of a regional organised crime syndicate had uncovered a complex web of counterfeiting, arms dealing, people smuggling, drug running and links to terrorist groups across Southeast Asia and the Middle East.

170He said the terror groups included Al-Qaeda, Abu Sayyaf and Jemaah Islamiah. Mr Fernyhough released the details yesterday to coincide with the visit of the FBI director Robert Mueller and said the investigation demonstrated the extent of the links between counterfeiting and terrorism.

171“We are investigating a major smuggling kingpin who is running a syndicate with operations in six countries, involving 50 individuals, four key players, using 70 front companies in multiple jurisdictions,” Mr Fernyhough said.

172“This syndicate is operating in the counterfeiting market, making enormous amounts of money which is being used to supply, fund and resource terror groups.”

173He said counterfeit products being smuggled out of China and the Philippines and through Hong Kong included cigarettes, designer wear, car parts and fake pharmaceutical goods.

174Mr Fernyhough, a former counter-terrorism agent with the Hong Kong government, said the finding of his firm’s private investigation had been referred to police and intelligence officials in several countries throughout Asia.

175“This clearly demonstrates the frightening extent to which terror groups are turning to the counterfeiting business to make their money and fund their campaigns,” he said. “There is no quick fix but it is a monumental problem that needs to be immediately addressed.”

Washing the money

176Hong Kong police are also investigating potential terrorist and drug-trafficking links to an underground banking network after helping to smash a suspected $120 million international money-laundering racket operating out of the United Kingdom.

177Nine premises, including residential units and commercial locations, were raided across Hong Kong in June last year as part of a synchronised operation also involving police in Britain, America and Dubai.

178No arrests were made in Hong Kong, but documents were seized for further investigation, a police spokeswoman said.

179“The Narcotics Bureau was requested by its counterparts in the UK early last year to assist in the investigation of a suspected money-laundering case which occurred in the UK,” she said.

180“Initial inquiries showed that some bank accounts and companies in Hong Kong are involved in the case.”

181Narcotics Bureau Chief Superintendent Kenny Ip Lau-chuen said the ongoing investigation was exploring the links to the underground hawala banking system. The ancient system of underground or remittance banking has come under heavy scrutiny after it was revealed al-Qaeda terrorists relied heavily on the hawala network to transfer funds.

182Mr Ip said: “We are still investigating how the criminals made the money. But we do know there was a lot of money coming in from UK and some of that money was then being sent back across the world to all sorts of destinations.”

183Mr Ip said he was unable to reveal if the multimillion-dollar money trail was related to a terror network or drug traffickers.

184He said further raids in Hong Kong and abroad were expected.

185Detective Chief Inspector Paul Owen, of the Telford, Shropshire, branch of the British National Crime Squad in the English Midlands, said: “We believe that large sums of cash, in some cases tens of thousands of pounds, were paid into banks here and then transferred to Hong Kong.

186“It is still too early to give exact figures about the total sum of money involved, but our investigations would suggest that in excess of $120 million was processed.”

187Mr Owen said the suspected laundering operation might have been active for several years. It is believed that the alleged smuggling ring, thought to be centred on the West Midlands, saw large amounts of cash transferred abroad, mainly to Hong Kong and Dubai but also to at least 10 other unnamed countries.

188“Money laundering is the centre of organised crime. If we stamp on the people committing money laundering we will have a knock-on effect and a direct impact on organised crime,” Mr Owen said.

Spreading the tentacles

189One very interesting case to surface last year was an investigation into the cold-blooded assassination of four men in Fiji. Like the layers of an onion skin, the deeper a international team of investigators including Interpol, Australian, Malaysian, Fijian and Hong Kong dug, the more it revealed about triad activities on a transnational scale.

Hong Kong triad link suspected in gangland-style shark fin murders

190Police investigating the execution-style killings of two Hong Kong businessmen in Fiji believe the men were victims of a gangland dispute over the billion-dollar-a-year shark fin trade between the city and the South Pacific.

191Four men were found murdered - all shot through the head from close range - at the Live Fish Export Fiji factory about 10km outside Suva on Friday afternoon.

192The victims were general manager Kwok Kaa-kee, 36, and businessman Chong Ho-kin, 23, both from Hong Kong; business partner Wu Guiuiu, 19, from the mainland; and security guard Rupeni Talakuli, 26, a Fijian.

193Hong Kong police and Interpol are helping with the investigation into what has been described as “a Chinese mafia or triad-related killing”.

194“It was a gruesome scene,” police spokesman Mesake Koroi said. “The bodies have not yet been moved from the factory… there was a lot of blood.”

195He said it appeared the assassin used a pillow to muffle the sound of gunshots and all of the victims had been shot through the head from close range.

196“This was not random. This was a very clinical killing. The killer or killers placed a pillow over their face and, using a gun or spear gun, shot them all in the head,” Mr Koroi said. He rejected earlier reports that the victims were tortured before they were murdered. “There have been some reports of a struggle, and that the victims were locked in a freezer and tortured, but we do not believe this.”

197Mr Koroi said no murder weapon was found at the scene. The results of postmortem examinations are expected today.

198Two Chinese nationals, one believed to be from Taiwan and the other from Hong Kong, have been held for questioning in relation to the murder inquiry.

199Major crime detectives yesterday said the investigation centred on the highly lucrative shark fin industry operating out of the Fijian capital. They were interviewing key members of the trading community, most of whom are from Hong Kong and the mainland. “There are indications there has been some form of rivalry between these two Hong Kong businessmen and other shark fin producers over the price they have been paying for shark fin,” Mr Koroi said.

200“We are trying to work out how much of the gangland-style slayings are related to the Chinese mafia or Hong Kong triads. That is why we have asked Interpol and Hong Kong police to help.”

201Two of the shooting victims were linked to the owner of the popular Phoenix Chinese restaurant in central Suva.

202The restaurant owner, who refused to give his name, yesterday told the Sunday Morning Post he was the father of the 19-year-old victim.

203He said he believed the murder was a “revenge killing”.

204He said no money was taken, indicating the motive was “cold-blooded murder”.

205“It [the killing] was because of business disputes with other Chinese people.”

206But he refused to elaborate on the nature of the dispute, saying he feared for his own life and the safety of his family and children.

207According to police, both Hong Kong victims had been due to fly home today to discuss “business opportunities in the South Pacific” with other partners.

208The men had only been in Fiji for two weeks trying to start up the fledgling fish factory operation.

209Trade in shark fins is a lucrative business. In Hong Kong, the world capital of shark fin cuisine, retail prices generally range from $300 a kilogram to $4,400, depending on the variety, while a bowl of shark fin soup can sell for up to $700.

HK pair shot dead in Fiji are linked to money laundering

210Two Hong Kong men shot dead in Fiji in a gangland dispute surrounding the lucrative shark-fin trade have been linked to a series of shadowy money-laundering transactions in the South Pacific, according to police sources.

211Detectives investigating the killings have uncovered a series of large cash transactions and a paid shipment order to export two tonnes of shark fin to Hong Kong in connection with the two dead men.

212Hong Kong police and Interpol are assisting with the investigation into what has been described as “a Chinese mafia or triad-related killing”.

213Fijian authorities have detained two men, a Taiwanese and a mainland resident, and a manhunt is under way in the rugged interior for another mainland man. All three suspects are believed to be hired assassins.

214Four men were murdered in the dispute-general manager Kwok Kaa-kee, 36, and businessman Chong Ho-kin, 23, both from Hong Kong; business partner Wu Guiuiu, 19, from the mainland; and security guard Rupeni Talakuli, 26.

215All were shot through the head at the Live Fish Export Fiji factory about 10km outside Suva on August 22.

216The two Hong Kong men had been in Fiji for only two weeks and were trying to start up the fledgling fish factory operation.

217Senior police sources yesterday revealed the murdered men sparked a bitter gangland dispute when they attempted to undercut competitors.

218“We have been told they tried to revolutionise the whole export business in Fiji,” the source said.

219“Most of the other traders, mostly Hong Kong and Chinese businessmen, are only paying about US$2 per kilogram for shark fin. But these guys were offering as much as US$6 per kilo… we understand some of the Asian business people did not like this very much.”

220Postmortem examinations have revealed that the victims were killed with a. 38 calibre semi-automatic pistol at point-blank range.

221In each case, an assassin used a pillow to muffle the sound of the gunshot. One of the Hong Kong men suffered a deep gash to the throat, in addition to being shot.

222The police source said the general manager was shot in the head, but the killers also symbolically burned a pile of local currency around his head.

223“We interpret this as being some symbolic ritual to show he was murdered because of the money,” the source said

Ice – and the big thaw

224A sophisticated international drug syndicate financed out of Hong Kong - and linked to a $4.38 billion Ice haul - has been smashed after simultaneous raids in Hong Kong, Malaysia and Fiji.

225Four Hong Kong syndicate members in Fiji, two in Malaysia and one in North Point, Hong Kong, were among 14 people arrested in what investigators describe as one of the world's biggest drug busts last June.

226More than 60 officers from Hong Kong, Fiji, Australia and New Zealand raided an industrial estate and three homes in the Fijian capital of Suva, uncovering the largest crystal methamphetamine factory found in the southern hemisphere.

227Seven people, including four Hong Kong Chinese, were arrested and the factory had enough chemicals to produce 1,000kg of the popular party drug Ice in less than a fortnight. The drug would have had a street value of $4.38 billion.

228In Hong Kong, Narcotics Bureau officers raided several addresses, arresting one man and seizing $30 million in a suitcase - as well as jewellery and valuables.

229At the same time in Malaysia, six syndicate members were arrested, including two Hong Kong Chinese - a man and a woman.

230Chief Superintendent Kenny Ip Lau-chuen, head of the Hong Kong Narcotics Bureau, last night said the raids were the result of a 14-month covert investigation, dubbed Operation Outrigger.

231Mr Ip said the cartel was also involved in trafficking heroin, Ecstasy and cannabis in Australia, Asia and Europe.

232Fijian Police Commissioner Andrew Hughes said the drugs were destined for Asia, Europe, the US, Australia and New Zealand.

233“This [was] the largest clandestine laboratory ever discovered and disrupted in the southern hemisphere. [It] is a frightening example of transnational organised crime elements using Fiji as a staging ground,” Mr Hughes said.

234Officers found drugs “bubbling away” in a warehouse stacked with drums of chemicals. An Asian expatriate is believed to have rented the warehouse.

235It was backed by “a cartel with Hong Kong and Malaysian connections… the thing is being financed from Hong Kong”, Fijian police spokesman Mesake Koroi said.

236Tony O'Connor, Fiji’s director-general of customs, said the seven men arrested were expected to appear in court in Suva tomorrow.

237The factory could also have had a devastating environmental impact - for every 1kg of drugs made, 6kg of toxic waste was produced.

Don't send me to HK, begs “dead man walking”

238Police say triad boss wanted over killings and car bombings faces certain death at hands of rivals

239A triad boss arrested in Malaysia is fighting moves to have him extradited to Hong Kong to face murder charges, because he is a “dead man walking” if he comes back, according to police.

240Chan Yiu-hong, also known as Kai Hong, fled Hong Kong more than 10 years ago after rival gangsters put out a contract on his life during a turf war in Wan Chai in the early 1990s.

241Chan has been lobbying Malaysian authorities to keep him in the country to avoid being returned to face “certain death”, Organised Crime and Triad Bureau (OCTB) sources have revealed.

242Justice and law-enforcement authorities are negotiating over the case.

243Chan is wanted in Hong Kong and Macau by police investigating a series of killings and car bombings.

244Malaysia has announced it plans to detain Chan-brother of the late “Tiger of Wan Chai”, Andely Chan Yiu-hing - for at least three years under the Dangerous Drugs (Special Preventive Measures) Act following his arrest three months ago. Malaysian police suspect Chan is a ringleader of an international crime syndicate found operating an illicit drug factory in Fiji capable of producing billions of dollars worth of the party drug Ice.

245“Chan is desperate not to come back to face trial in Hong Kong … if he does he is a dead man walking,” a senior OCTB officer said.

246“He has a contract out on his head and faces certain death if he ever sets foot in Hong Kong again.

247“He was involved in a particularly bloody power struggle between triads, and after he escaped he was told never to come back.”

248The Sun Yee On triad boss fled to Malaysia more than a decade ago, establishing himself in drug trafficking, gaming, prostitution and extortion rackets.

249He eluded the authorities by travelling on passports from the Republic of Nauru and from Gambia, sources said.

250According to the New Straits Times, Chan had a reputation in Kuala Lumpur as a big spender, blowing more than HK$100,000 in a night out on the town.

251Many of his friends were unaware of his underworld role, believing him to be a property speculator with a penchant for expensive watches and luxury cars, the paper said.

252Others knew him as a goldsmith, dealing in high-end ornaments and gemstones.

253Chief Superintendent Kenny Ip Lau-chuen, head of the Hong Kong Narcotics Bureau, told the Sunday Morning Post the raids that nabbed Chan and 13 other syndicate members in four countries were the result of a 14-month covert investigation, dubbed Operation Outrigger.

254He said the cartel was involved with heroin, Ecstasy and cannabis in Australia, Asia and Europe.

255Chan shot to prominence in Hong Kong's criminal fraternity when the murder of his brother - a 426 Red Pole officer [a rank for triad fighters] known as the “Tiger of Wan Chai” - left a power vacuum.

256His brother died on November 21, 1993, when three gunmen in motorcycle helmets opened fire as he left Macau's New World Emperor Hotel at 3.10am, hitting him in the head and chest.

257The 32-year-old was apparently killed in revenge for ordering the killing of 14K-affiliated film producer Wong Long-wai. Police believe Wong was shot dead for slapping the late Canto-pop songstress Anita Mui Yim-fong after she refused to sing during a celebration at a karaoke bar.

258Chan’s brother is believed to have infuriated rival triads by refusing to pay “compensation” for Wong’s death and by falsely bragging about being the hitman.

259The turf war between the Sun Yee On, Wo Hop To and Wunan gangs that followed his killing led to a bloody chopping in Lockhart Road, Wan Chai, which left six triad members in hospital. Following the chopping, the younger Chan fled to escape police and rival triads.

Fatman – China/India/ – Dea

260China’s transnational criminal underworld has been served a strong warning with the arrests of four “untouchables” and the dismantling of one of the world's biggest drug smuggling rings, says a senior US agent.

261The latest intelligence showed the business of a number of international drug traffickers had suffered heavily as a result of raids by the first joint Sino-US drug taskforce on May 16, the Beijing-based officer said.

262He said simultaneous raids in Fujian, Yunnan, Guangdong and Hong Kong aimed at the highly organised crime ring known as the 125 group had sent shockwaves through the underworld, both in China and overseas.

263Crime bosses who previously thought themselves beyond the reach of international law were now scaling back smuggling operations in the region, he said.

264The raids resulted in the indictment of 25 people by Manhattan federal court. They are accused of smuggling more than 680kg of heroin out of the Golden Triangle, through China into the US since 2000.

265Among those arrested was the group's alleged leader, Wong Kincheung, also known as the Fatman.

266Wong, 56, a Hong Kong citizen, and his three partners, referred to as “the untouchables” because mainland authorities believed they would never be caught, are in detention awaiting trial on drug trafficking charges in Fuzhou.

267Under mainland law, they face the death penalty.

268Three Hong Kong-based members of the 125 group were also arrested and are facing extradition to the US on charges of conspiring to commit an offence relating to dangerous drugs.

269Mak Kam-fai, 43, Tsui Yan-ko, 48, and Too Ka-keung, 35, are due to face committal proceedings on July 14.

270“It sends out a very strong message. A very powerful warning,” said the agent. “We were very fortunate in that we were able to pick up all the major players very quickly.”

271Agents in Canada, India and the US also led simultaneous drug raids. The agent said it was the first time Chinese drug lords had been found to be operating in India.

272“The case has resulted in the removal of a major threat. But it has also exposed how Chinese drug traffickers are looking to shift their operations away from the stringent law detection in this region and into the less traditional drug producing areas,” he said. “It shows [drug traffickers] are branching out, taking opportunities, and this is something we must be aware of.”

Triad’s $8m casino scam is exposed in Australian court

273A Hong Kong triad boss and heroin baron has been exposed as the mastermind of a card-dealing scam that fleeced Australia’s biggest casino out of more than HK $8 million.

274However, gangster Tong Ko-kon - jailed in Australia in 2001 for his part in a heroin ring - escaped further punishment as the croupier he recruited refused to give evidence against him.

275The failure to convince Tiffany Moss, a dealer at the Crown Casino in Melbourne, to testify against Tong at her Australian fraud trial last February has demonstrated the power the gangster apparently still wields from inside his maximum-security prison cell.

276Moss, 32, was sentenced to 15 months’ jail on February 5 for her role in one of the most complex scams in the casino industry.

277But police were unable to convict Tong, a female accomplice and another man who acted as the middleman between the croupier and Tong because of a lack of evidence, despite extensive video and audio surveillance.

278A spokeswoman for the Australian Crime Commission yesterday was unable to expand on the investigation into Tong’s powerful Luen Ying She triad society. She was also unable to comment on the hunt for Tong's wife, Jenny Tsui Shuk-fan, a former Miss Hong Kong contestant, who is believed to be hiding in the special administrative region.

279Hong Kong police are investigating transactions of millions of dollars through Hong Kong banks allegedly linked to her.

280Tong’s role as the mastermind of the “very sophisticated” card shuffling scam was exposed during last week’s trial.

281The court heard Tong hatched the plan to turn the odds in his favour during his heady days as a high-roller, when he gambled A$360 million (HK$1.8 billion) in a two-year gambling spree on the baccarat tables of the Mahogany Room in the Crown Casino.

282Tong and his wife lived in the casino where they were feted with A$2.5 million worth of free food, flights, accommodation and gambling chips between August 1997 and July 1999.

283For her part, croupier Moss was paid A$20,000 to flash cards as she shuffled the deck at her baccarat table on July 26, 1998. Tong went on to win A$1.4 million, while other gamblers won A$400,000 by copying his bets.

284Moss’ irregular shuffles were captured by security cameras and the scheme was uncovered.

285However, the card-dealing scam was just a sideline to the billion-dollar drug-dealing and money-laundering business Tong ran from his suite at the casino.

286Just as casino staff picked up the baccarat scam, Tong was the subject of a major international narcotics sting involving Hong Kong and Australian agencies.

287In police surveillance tapes and videos between April and August 1999, Tong brazenly told of his plans to become Melbourne’s biggest heroin wholesaler.

288He was arrested in August 1999 after police found 6.8kg of heroin worth $28 million in the boot of his car. Tong was jailed for 16 years.


Journalist specialized on organised crime, provided very informative elements on the triads and how they develop their business from the street level to the transnational crime.

© Institut de recherche sur l’Asie du Sud-Est contemporaine, 2007

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