Hong Kong police have frozen the equivalent of about $9 million held by a nonprofit group that raises money to help pro-democracy protesters, and they have arrested its four members — moves decried by critics as an attempt to clamp down on the city's protest movement and to smear its reputation.
Police on Thursday accused Spark Alliance HK, which raises money to support protesters who incur legal and medical bills, of being a money-laundering syndicate. Authorities said the group was linked to a crowdfunding online platform that "claims to collect donations to support people arrested in recent protests and violent activities."
Acting Senior Superintendent Chan Wai-kei, a financial investigator of Hong Kong's Narcotics Bureau, said police had arrested four people between the ages of 17 and 50 for alleged money laundering and had frozen roughly $9 million in funds and insurance products.
Chan said the online platform had raised $10 million in the past six months, but that police had found "suspicious" financial transactions in a shell company linked to the group. He said they also had discovered "a large amount of money" invested in personal insurance products. He said police made the arrests because these were hallmarks of money laundering.
Police also said they had confiscated $16,675 in cash and found receipts for supermarket coupons worth $21,165.
"We do not rule out the possibility that the fund was used as a reward to encourage teenagers to come out and join in the civil unrest," he said.
In response, Spark Alliance issued a statement condemning the police, saying authorities were making false allegations to smear its reputation.The group said the donations it receives fund legal and medical assistance for protesters arrested by police. Its mission statement on Facebook reads: "The Spark Alliance emerged in the most turbulent time in Hong Kong. As long as we can continue to fight together, we will usher in a glorious era for our city."
Critics of the police said the crackdown on the group was the latest attempt by authorities to crush monthslong civil unrest that has embarrassed Beijing and the government of the Chinese-ruled, semiautonomous city. They noted that actions taken mirrored tactics commonly used by the mainland Chinese authorities to discredit groups critical of the government. Independent, nonprofit groups in mainland China seen as posing a challenge to the government often find themselves under investigation for alleged financial irregularities.
Last month, HSBC Bank suspended Spark Alliance's corporate account, which it used to collect donations, saying its activities did not match the client's stated business purposes. On Friday, dozens protested the bank's move near its headquarters, alleging the police investigation was an attempt to intimidate the group's donors. Many older supporters of the movement have been donating money and resources as well as providing shelters for young protesters on the front lines.
In a statement, HSBC insisted that the closure of Spark Alliance's account was "completely unrelated to the Hong Kong police's arrest of the four individuals" and "unrelated to the current Hong Kong situation." It noted that regulators expect banks to review accounts regularly.
Attorney Duncan Ho told public broadcaster RTHK that providing financial aid to people who have been charged with offenses was not a crime and questioned the basis of the police investigation of Spark Alliance.
"It's not a direct subsidy to what the protesters are doing, even if the protester has committed any offense, in terms of public order like unlawful assembly, or even serious crimes like arson, et cetera," he said.