S’wak police, Bank Negara launch special op against unlicensed financial services operators

KUCHING (Nov 29): The Royal Malaysia Police (PDRM) together with Bank Negara Malaysia (BNM) has launched a special operation against unlicensed financial services operators in Sarawak.

Deputy Inspector-General of Police Datuk Seri Ayob Khan Mydin Pitchay said eight premises were simultaneously raided – in Sibu (2), Selangau (2) and Batu Niah (2), Mukah (1) and Bekenu (1).

“A total of RM1,039,581 in cash and IDR1,116,000 (Rupiah) were seized and 17 local individuals were brought in for their statements to be recorded,” Ayob told a press conference at the Sarawak Contingent headquarters today.

He added that investigations revealed that the illicit money transfer outfits provide services in sending money to Indonesia, Bangladesh, Myanmar and the Philippines.

These operators, he said, would disguise their illegal activities as legitimate business such as by dealing in telecommunications services or mini-markets as camouflage.

He also informed that police have identified that these illegal business outfits operate in areas with a high number of foreign workers.

“These unlicensed financial service operators are being investigated under Section 4(1) of the Money Services Business Act 2011,” said Ayob.

He added that there is a possibility that these operators might be involved in money laundering activities, which is an offence under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).

“We are also examining if these operators are connected to other serious crimes which include organised crimes involving illegal gambling and fraud. An analysis is underway on cash transactions and financial transactions involving 39 bank accounts totalling up to RM47 million between 2021 and 2023,” said Ayob.

On another note, Ayob said these illegal outflow of funds had contributed an estimated 18 per cent to the shadow economy or RM275 billion to Malaysia’s gross domestic product.

He added that crimes which contribute to the shadow economy include trade mispricing, illicit fund transfers and corruption.

“To combat such financial crimes, PDRM and BNM have formed collaborations to monitor and investigate these illicit money services nationwide,” he said.

In 2022 and 2023, he said joint enforcement actions were taken against 18 illegal money service operators in Kedah, Pulau Pinang, Negeri Sembilan, Johor, Pahang and Selangor.

He also revealed that similar enforcement operations will be strengthened and carried out nationwide as a warning to other unlicensed financial service operators to cease their illegal operations.

Ayob also advised the public to not engage with any unlicensed operators or agents for currency exchange or money transfer transactions.

“Any transactions with these illegal or unlicensed financial service operators are done at your own risk,” he warned.