Four people have been arrested over an alleged diamond trading racket used to launder some HK$500 million, customs officers said on Thursday.

Divisional commander Chan King-wai said they believe a gang exported synthetic diamonds to India but falsely declared them to be natural diamonds worth over 100 times more.

"By doing so, the [alleged] syndicate managed to transfer a significant amount of suspicious funds from India to Hong Kong throughout 2021. The total amount of the suspicious transaction reached HK$500 million," he said.

Chan said officers carried out eight raids last week, seizing some synthetic diamonds and arresting four suspects aged between 30 and 56.