Shenzhen police said on Jan 14 that they had cracked an illegal private bank involving 120 million yuan ($19.3 million).

The underground bank was hidden in an unnoticeable store in Bao'an district, with a sign indicating it sells grain and cooking oil, according to the economic crime investigation department of Shenzhen Public Security Bureau.

Thanks to a whistle-blowing letter in August, police found after a few months' investigation that the store, without any stock of grain or oil at all, offered illegal money exchange services.

According to the police, the shop owner, surnamed Zhuang, started illegal money exchange services in 2008. He and his two nephews opened many accounts at different banks to transfer money.

Some medium and small entrepreneurs sell foreign currencies to Zhuang's underground bank when they need large amounts of Renminbi on short notice. Zhuang will sell the foreign currencies to larger illegal banks, which would then be sold to individuals and enterprises who need large amounts of foreign currency immediately.

From January 2011 till they got caught, Zhuang had operated foreign currency exchange trading worth 120 million yuan.

The three suspects were recently arrested.

In 2012, the Shenzhen public security bureau cracked down on eight underground banks involving 670 million yuan and arrested 38 suspects.

According to the police, the underground banks provided services for tax evasion and money laundering. They also encouraged crimes including corruption, smuggling, drug trafficking and embezzlement.