Prosecutors are investigating a large laundering operation said to have involved insiders at Taichung Commercial Bank, with the sums traced put at NT$3.6 billion.

Investigators believe bank staff assisted in opening accounts and moving funds. Whether such insiders existed is the central question of the case.

The court granted bail of NT$5 million to the key figure, reported to be a property developer, and confiscated his passport to prevent departure.

Where the defences break

Anti-money-laundering systems rest on three pillars: identity checks at account opening, transaction monitoring and suspicious-activity reporting. An insider disables the first.

Bank surveillance is largely designed against intrusion from outside. Internal control relies on mutual checks and random audits, which thin out at smaller branches.

Taiwan has tightened enforcement of its anti-laundering law in recent years, but funds routed through property transactions are slow to detect because the deal structures are complex.

There is a lesson for Chinese business owners moving between Korea and Taiwan. Lending one's name to an account can itself be an offence, and claims of good faith are often not accepted.