Hong Kong (AFP) - Hong Kong authorities have arrested two men for laundering funds worth HK$3.5 billion ($446 million) by reselling precious metals, one of the city’s largest money-laundering cases, officials said Wednesday.

The two were involved in a scheme selling around eight tonnes of precious metals – mostly gold and palladium – between 2020 and 2021 for returns “incommensurate” with their backgrounds, customs official Rita Li said at a press conference.

It was a record for money-laundering cases busted by Hong Kong Customs, Li said, although the police have cracked larger cases.

Precious metals can be bought and sold anonymously in Hong Kong and are attractive to criminals because of their high value, small size and ease of transportation, Li added.

“Unlawful elements can easily use proceeds from crime to buy precious metals and then resell them, or conduct multi-layer transactions, to launder money,” she said.

The two men used company accounts to receive large sums from precious metal trading firms and jewellery stores, then quickly transferred the funds to shell companies or accounts abroad, authorities said.

The suspects – believed to be linked to a crime syndicate – were arrested for money laundering last Friday and are on bail pending investigation.

Authorities say they are investigating the origins of the precious metals and will not rule out further arrests.

Last month, four suspected Hong Kong gang members were arrested for laundering $52 million over a two-year period.