The Judiciary Police and Monetary Authority of Macau jointly conducted on Thursday raids against the suspected use of illegally-modified handheld China UnionPay Co Ltd card payment terminals. Officials visited 13 Macau shops. The police arrested 23 people – connected to eight shops – suspected of committing computer fraud and being involved in organised crime.
The suspected main aim in illegally modifying the terminals was to use them for “gaming purposes”, a spokesperson from the Judiciary Police confirmed to GGRAsia.
Mainland visitors to Macau are only allowed to take a daily limit of RMB20,000 (US$2,985) in cash when crossing the border. Mainland residents gambling in Macau have routinely got around this restriction by purchasing items from one of Macau’s pawnshops or jewellery stores using their UnionPay cards, immediately returning the items in exchange for cash – a process that is not illegal under Macau law. The retailer involved usually charges gamblers a fee under that system.
The eight shops involved in the case were registered as either jewellery or telecommunications products sales outlets, but were suspected of conducting “pawnshop-like” business, the police spokesperson further noted to us.
Of the 23 people arrested, the Judiciary Police identified 10 as being suspected of working as “tip hustlers” in casinos. Such persons typically solicit gamblers that possess UnionPay cards and need fresh cash, and invite the gamblers to leave the casino floor and attend a nearby UnionPay-enabled shop to get money, said the head of the Judiciary Police’s IT crimes division, Sou Sio Keong, in a press briefing held following the Thursday raids.
The police seized 10 UnionPay handheld terminals – also known as point of sales (POS) units – on suspicion they had been illegally modified to register Macau-based sales transactions as having taken place on the mainland, where transaction fees are smaller, Mr Sou said.
In one of the shops they attended, the police also uncovered what they called an “underground workshop” where they found devices they suspect were used to modify the UnionPay terminals.
“The bureau [Judiciary Police] believes that…some of the mainland Chinese POS units were smuggled here, and after some modification, these units were sold to the shops here in Macau,” Mr Sou said during the press briefing.
Mr Sou explained that such sales terminals have typically been tampered with in such a way that the UnionPay network identifies them as being registered and operated in mainland China, where transaction fees charged by the UnionPay system are much lower than in Macau. According to him, the shops involved in the case charged users a fee capped at RMB26 per transaction.
The total cash value of the suspected illegal transactions via the seized UnionPay terminals is still being investigated, Mr Sou added.
The value of detected transactions in Macau using suspected modified UnionPay handheld terminals amounted to MOP2.1 billion (US$262.9 million) in the first half of 2016, Portuguese news agency Lusa reported in July, citing information from the Judiciary Police. The news agency previously reported that in calendar year 2015 the cash value of such suspected illegal transactions was MOP1.22 billion.
Most cases involving suspected illegal transactions through unregistered UnionPay terminals took place inside casinos and surrounding areas, stated Lusa’s report covering transactions in first-half 2016.
“It is the first time that we have uncovered such a large-scale operation of tampering with POS terminals,” said the Judiciary Police’s Mr Sou, when asked by local media to comment on the Thursday raids. He added the police were not ruling out the possibility that more shops in Macau might have been using illegally-modified UnionPay handheld terminals.
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Suspicious transaction reports filed by Macau gaming operators in the first half of 2018