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December 1, 2012

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Police uncover 2 transnational fraud gangs, net 9 suspects

TWO transnational cyber fraud rings have been thwarted and nine suspects detained, Shanghai police announced yesterday.

The suspects, all foreigners and led by two men identified as Omotunde and Kazeem, hacked into e-mail servers at dozens of foreign trade companies to monitor their cyber communications, police said. When a payment was issued by one of the hacked companies, the suspects would forge an e-mail from its trading partner and ask for the payment to be made to a designated account, a Shanghai Public Security Bureau official said yesterday.

Companies from the US, the United Arab Emirates, Spain and other countries had been defrauded out of 2.4 million yuan (US$385,462) since August 2011, police said.

Local police are working with Interpol to track down other suspects overseas, officers added.

"Many foreign trade companies are unaware of this kind of cyber fraud and do not do anything to protect their business even though such scams have occurred in several countries," said Yu Lie, a deputy director of Shanghai police.

Local police were alerted in August 2011 when the Chinese partners and representatives of foreign trade companies reported payments that were supposed to go to the local firms never arrived.

"We found the suspects hacked into mail servers of Chinese and foreign trading companies to monitor their transactions. Once they reached the payment stage, the suspects would send scam e-mails to trick the foreign companies into transferring money to bank accounts held by the suspects," said Chen Zhen, another deputy director of Shanghai police.

The suspects quickly transferred the money to other accounts and withdrew it, Chen said.

To avoid being caught, the suspects hired Chinese to withdraw money for them with a 10 percent commission per transaction, police said. Once they had the money, the suspects transferred it to overseas bank accounts, officers said.

After visiting about 100 banks across China, viewing more than 200 hours of surveillance footage and reading 2,300 case files, officers identified the suspects.

"They used fake passports to open bank accounts in 16 cities in China," Chen said.

The suspects were caught by police in recent raids.

"Initially, many foreign companies thought their Chinese partners were cheating them. They complained to their consulates, which damaged the foreign trade market in China and the reputation of Chinese companies," said Chen.


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