Police in Hong Kong have arrested three individuals accused of stealing HK$3.11 million (~$400,000) worth of Tether (USDT) and seized almost 11,000 fake banknotes from their office.

The three suspects allegedly convinced a 44-year-old businessman to convert the USDT. They reportedly showed him bundles of cash he would receive in return before instructing him to transfer his USDT into the scammers’ crypto wallet.

However, according to an insider source who spoke to the South China Morning Post, “Except for two genuine banknotes placed on the top and bottom of each bundle, the others were bogus bills, known as training notes.”

The source said that after the transfer, “The merchant asked to inspect the banknotes, but the employees refused to allow him to check them, claiming that they had not received instructions from the store manager via phone.”

A picture of a Hong Kong dollar training note listed for sale on eBay.

Read more: Hong Kong crypto crime triples, police handling 170% more cases

The man reported the incident to the police last Friday. On Monday, police announced they had raided the offices and seized 10,978 forged HK$1,000 banknotes.

The notes look real despite having Chinese text printed on them that says ‘practice coupon’ and they lack watermarks.

Police arrested and accused a 42-year-old woman, a 24-year-old man, and a 40-year-old man of obtaining property by deception and possession of counterfeit banknotes. The three are also being questioned about similar instances of crypto conversion scams.

If found guilty, they could receive a maximum of 10 years in jail for obtaining property by deception and 14 years for the illicit use of fake banknotes.