Taichung Bank’s six executives colluded with a fraud ring to launder money; the Financial Supervisory Commission issued a record-breaking fine of NT$32 million

According to a report by Taiwan’s Central News Agency (CNA) on May 13, Taiwan’s Financial Supervisory Commission (FSC) announced on May 12 that it imposed a fine of NT$32 million on Taichung Commercial Bank (Taichung Bank) for multiple deficiencies in the bank’s deposit account opening procedures, ongoing customer identity due diligence, and account monitoring mechanisms. The penalty sets a record for the highest fine in Taiwan’s banking industry.

FSC Penalty Decision and Legal Grounds for Violations

According to CNA, FSC Bank Bureau Director Tong Zheng-zhang said that starting from April 2024, 10 branches of Taichung Bank conducted account openings for 21 corporate households without establishing proper review mechanisms regarding customer identification procedures and online banking credit limit settings. In addition, multiple serious deficiencies were also found in subsequent steps, including customer identity due diligence, verification of abnormal transaction monitoring, and suspicious money-laundering reporting. The FSC concluded the bank failed to properly implement its internal control system, and that a single act violated multiple provisions of administrative law obligations. Therefore, the FSC imposed the maximum statutory fine of NT$32 million.

From Start to Finish: Executives Colluding With a Fraud Ring to Control Accounts

According to CNA and an investigation by the Taichung District Prosecutors’ Office, Hong Yue-peng, the person in charge of Wanli Development Company, for the purpose of facilitating money laundering, from September 2024 to April 2025, colluded with six supervisors consisting of managers and assistant managers from four branches of Taichung Bank. The implicated supervisors assisted the criminal group in opening financial accounts using the names of 12 fictitious shell companies. During account opening, they intentionally failed to retain footage as required by regulations, and they increased the accounts’ large-value wire transfer limits.

According to the report, when the head-account triggered a suspicious money-laundering alert report, the implicated supervisors intentionally delayed reporting. Even after completing the reporting, they still failed to carry out anti-fraud measures such as temporarily suspending or restricting remittances from the accounts. This allowed illegal proceeds from the scam and online gambling to rapidly and densely be transferred out. In total, the illegal fund flows involved in the case amounted to NT$3.64 billion.

FSC Bank Bureau Deputy Director Zhang Jia-kuei said that the case was identified during the FSC’s 2025 financial inspection after the regulator discovered abnormal fund flows, after which the FSC proactively referred the matter to investigators for follow-up. After the prosecution office launched searches, it seized and froze nearly NT$269.10 million in assets. The prosecutors then formally indicted seven individuals on charges including special breach of trust under the Banking Act and money-laundering prevention law violations, among others.

FSC’s Six Supervisory Requirements and Taichung Bank’s Response

According to CNA, in addition to imposing the penalty, the FSC also issued six supervisory requirements to Taichung Bank, including: comprehensively reviewing the deficiencies and developing and proposing strengthening improvement measures to the board of directors; conducting a full review of account openings for cases actively recruited by bank staff to ensure appropriateness of the screening; and requiring that within one month, the bank hire external professional institutions to recalibrate its money-laundering prevention mechanisms.

Taichung Bank subsequently issued a material information disclosure stating that it would carry out the required improvement measures in accordance with instructions from the competent authority. It also emphasized that the company’s operations are currently normal, capital adequacy is not in question, and that overall finances and business have not been affected.

Frequently Asked Questions

What was the FSC’s fine against Taichung Bank, and what record did it set?

According to a CNA report on May 13, 2026, the FSC announced on May 12, 2026 that it imposed a NT$32 million fine on Taichung Bank, setting the highest fine record in Taiwan’s banking industry.

How many people were involved in Taichung Bank’s money-laundering case, and what was the scale of the fund flows?

According to CNA and materials from the Taichung District Prosecutors’ Office, there were six Taichung Bank supervisors involved, and together with the external mastermind Hong Yue-peng, a total of seven people were formally indicted. The illegal fund flows involved totaled NT$3.64 billion, and the criminal period was from September 2024 to April 2025.

What specific follow-up supervisory requirements did the FSC impose on Taichung Bank?

According to CNA, the FSC required Taichung Bank to comprehensively review the deficiencies and report to the board of directors, conduct a full review of the suitability of account opening assessments for cases actively recruited by bank staff, and, within one month, hire external professional institutions to recalibrate and improve its money-laundering prevention mechanisms.