Hong Kong customs makes largest-ever gold smuggling bust

Melted and moulded into parts like motor cores, screws, and gears, the smuggled gold was intercepted last month in two air compressors that were sent by air from Hong Kong to Japan and estimated to be worth HK$84 million ($10.7 million), the customs department said at a press conference.

"This is the largest gold smuggling case in our Hong Kong Customs record," said Lau Yuk-lung, the customs' syndicate crimes bureau acting chief.

Hong Kong is one of the largest gold trade hubs in the world and prices have recently been on the rise as investors seek asset security against geopolitical uncertainties and inflation.

Smuggled gold in Hong Kong used to be detected mostly at land checkpoints along the border of Hong Kong and mainland China, where inspections of cross-border trucks could lead to the discovery of gold slabs -- and the arrest of truck drivers.

Lau said in this latest case the syndicate "racked their brains" to make use of the space and structure of the air compressors to hide the gold.

But the texture and the extraordinary heaviness of the compressors roused the suspicions of the customs department's inspectors, Lau said.

"Our investigation showed that the syndicate tried to smuggle the gold in order to evade taxes in Japan, which, if successful, would be equivalent to around HK$8.4 million," Lau added.

One man aged 31 and reported to be a company director was arrested and released on bail, Lau said, adding that more arrests could be made.

Smuggling carries up to seven years in jail and a maximum fine of HK$2 million under Hong Kong laws.