$2 billion illegal gambling ring broken up in Taiwan

Jon Pill
Posted on: March 08, 2021 05:54 PST

Chuang Chou-wen, the Taiwanese billionaire, joined a group of 32 people indicted in Taiwan this week. The Taichung District Prosecutors Office nicked the gang, all employees of Chuang's business operations, for running an enormous illegal online gambling operation.

The fuzz put Chuang and his co-conspirators in cuffs back in November of 2020 and subsequently charged them with gambling, engaging in organized criminal activity, and tax evasion. Since then, Chuang has been enjoying the hospitality of the Republic until the resolution of his trial.

In South East Asia, people know Chuang as a philanthropist. He holds honorary titles in Malaysia, Cambodia, and Indonesia and his enormous business holdings have developed properties across the region.

Online gambling is not legal in Taiwan, though you can play at brick and mortar venues. But until recently, the government did not enforce the gambling law with any great seriousness. This made the island one of the bigger grey markets for online poker sites.

Despite this, in September of last year, PokerStars pulled out of the Taiwanese market. Now it looks like they did so in just the nick of time. Some poker sites still unofficially serve Taiwanese patrons. They may be reassessing that business practice in the near future.

Turtles all the way down

Given the financial nature of his crimes, the city of Taichung confiscated a huge number of Chuang's assets. This was to ensure he did not attempt to liquidate, hide, or launder them prior to trial. Among the Santa's sack of a haul were: 41 properties, 13 sports cars, and cash to the tune of NT$1.2 billion ($43 million) and US$2.64 million.

Now it appears that the 50-year-old businessman made a portion of his fortune in the gambling business. Since 2014, his company, the Xinliwang Group, owned a complicated structure in which 12 separate subsidiaries of the group joint owned and operated an online gambling platform called GPK Bet.

Over-complicated financial structures are one part of the legal definition of tax evasion in many jurisdictions.

This wasn't the last of the turtles. The platform was host to 54 gambling systems providers and 532 gambling sites. The group's finances then passed through a maze of bank accounts that included over 800 dummy accounts on the Chinese mainland.

In all, the Xinliwang Group stands accused of earning NT$59.4 billion (US$2.13 billion) in profits from its gambling holdings. To add insult to injury, despite laundering the profits, Chuang also made himself liable for evading NT$266 million (US$9.52 million) in Taiwanese taxes.

Chuang stands under indictment with 31 of his employees who help facilitate the enormous criminal enterprise. There but for the grace go the operators of PokerStars. They must be giving themselves shoulder injuries patting each other on the back.

Featured image source: Flickr