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January 31, 2012

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36m yuan illegal currency dealer jailed

AN illegal foreign currency dealer whose transactions exceeded 36 million yuan (US$5.69 million) in three years was yesterday jailed for five years.

Yuan Leixin, 60, was also fined 30,000 yuan for operating an illegal business, at the Pudong New Area People's Court.

However, Yuan claimed he earned just 25,000 yuan out of the multi-million yuan business.

The court heard that 10 years ago Yuan became unemployed and started selling foreign cigarettes near People's Square.

When numerous customers asked if he traded in foreign currency, Yuan decided to move into this area.

Trading mainly in US dollars, Yuan developed a reputation as a smart operator, which helped him expand the business, the court heard.

"People always said my husband had a strong sense of the market," Yuan's wife told the court. "But I knew it was against the law and high-risk."

To attract more clients, Yuan handed out cards near banks on Fuxing Road and Fangxie Road in Huangpu District.

"We would negotiate the rate first. The client would transfer money into my account after I gave them foreign currency in cash," Yuan told the court.

Yuan said clients could save 3 yuan on every US$100 transaction and 5 yuan on each 100 euro transaction (US$131), compared to bank rates.

As the business grew, Yuan opened more accounts in the names of family members to process transactions.

When held by police, Yuan had 21 bank cards on him.

However, little money was found in those accounts. Yuan said he shared passwords with other scalpers in case they needed to change large sums for VIP clients urgently.

The court heard that Yuan's clients included students, stock traders, travel agencies and business travelers.

Yuan also paid bank employees to recommend clients to change money through him.

His biggest client exchanged more than US$4 million in 20 transactions, the court heard.

Between July 2007 and September 2010, Yuan bought and sold foreign currency worth more than 36 million yuan, including US$4.76 million.

Yuan appealed for a lighter punishment, saying he earned just enough to make ends meet.

But the court affirmed an earlier lower court verdict.


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