16 arrested over claims of online extortion

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16 arrested over claims of online extortion

By Ma Yue (Shanghai Daily) 08:15, September 09, 2013

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Police have cracked down 11 fraudulent websites and arrested 16 people accused of blackmailing companies by pretending to be Party and government officials or reporters and threatening to post damaging information about them online.

The suspects were involved in more than 120 cases and extorted a total of more than 3 million yuan (US$490,000), the Ministry of Public Security said.

One main suspect had help from a local official in the eastern province of Jiangsu who tipped him off when violations by companies were found by regulators, Xinhua news agency reported yesterday, citing an announcement by the ministry.

“I just wanted to make some money through reporting stories with negative issues and attracting online visitors,” the suspect. Zhong Wei, 45, was quoted as telling police.

Zhong used fake business cards and documents to masquerade as a Party discipline official, Xinhua said.

Some companies paid hush money even though they knew the reports about them were false due to a fear of gaining a bad reputation, Xinhua said.

“We’ve been working so hard to establish a good image for our enterprise, so we’d rather spend money on ‘peace’ even though their stories were purely fabricated,” one real estate company manager told Xinhua.

Other suspects included a schoolteacher who wrote phony news items and an engineer who managed the websites.

Police said Dou Yugang, 48, who had worked in a government publicity office, used his position to blackmail companies with the help of Zhong, who registered and operated six counterfeit news websites since 2010. Police said Zhong hired Huang Tao in 2011 to manage the websites.

In April, Zhong sent a fax to a real estate company in the eastern city of Xuzhou in the name of one of his websites. He claimed they were about to expose one of the company’s projects that had violated regulations. Several days later, police said Zhong visited the company’s director in Beijing pretending to be a reporter. He demanded 200,000 yuan or he would publish an article about the company’s “corrupt business practices,” police said.

The company approached Dou, who had a reputation for “settling such problems,” and paid the 200,000 yuan, which was split between Zhong and Dou.

In a similar case last November, Dou is said to have disclosed a rumor that a foreign investment company in Xuzhou received a plot of land for free. Zhong filed a “report” and approached the company pretending to be a reporter. He successfully extorted 260,000 yuan, police said, with Zhong taking 147,000 yuan and Dou the remainder.

Zhong also worked with other suspects to extort companies, individuals and even government officials in Jiangsu, Anhui, Shandong, Hebei, Guizhou and Shanxi provinces, police said, gaining more than 2 million yuan from 60 cases since 2010.

Xuzhou police uncovered three other groups led by Fan Yuxiao, a Nanjing native who claimed to be responsible for a national news website, and Ju Jun, also from Nanjing, who claimed to work for a TV station.

The groups shared information with each other, establishing a crime chain committing extortion mainly through threatening to spread fake news online.

They would delete “news” from the websites once they received money, and even provide positive publicity services afterward, police said.

Their websites usually described themselves as “valuable and influential Internet platforms,” claiming to be established or supported by the National People’s Congress or departments such as the Party’s Central Commission for Discipline Inspection.

Experts said the case exposed loopholes in Internet supervision, and called for legislation and harsher punishments. “Shutdown is not the end, and more management methods should be explored to ensure regular, systematic and lawful supervision of websites,” Chen Weidong, a professor with the law school of the Renmin University of China, told Xinhua.