TAIPEI - Taiwanese prosecutors said on Thursday they were investigating a locally-based Hong Kong firm for allegedly carrying out huge money transfers for use in Macau casinos, circumventing strict forex rules.

The company, which opened in Taiwan in 2009, allegedly accepted deposits by Taiwanese gamblers allowing them to withdraw the money once they were in Macau, said the Taipei district prosecutors' office.

Prosecutors, who declined to identify the firm, said they suspected it was behind a total of $179 million in illegal transactions.

The head of the company was questioned on Wednesday on suspicion of violating Taiwanese law which stipulates only banks are allowed to handle domestic and international money transfers, it said in a statement.

Taiwanese media said the services are popular among some gamblers due to Taiwanese laws restricting the amount of cash travellers can take with them abroad to $10,000 per person.

The company reportedly also offered cash advances to entertainers, elected officials, business tycoons and leading gangsters to help promote business for the Macau casinos.

As there currently is no legal casino in Taiwan, many of the island's gamblers have turned to Macau, which is little more than an hour away by airplane.

The offshore Taiwanese island of Matsu last year passed a referendum to open the first legal casino in Taiwan, although it is still pending a separate law by the parliament on regulating gambling establishments.