Cross-Strait Taobao Fraud Operation Busted in Taoyuan

taobao fraud taoyuan
Police in Taoyuan arrested 19 people for fraud and money laundering. Photo courtesy police

There’s no shortage of stories about counterfeit products on Alibaba’s Taobao platform, and the company has attempted to crack down on such operations. In this case, the fraud involved no goods whatsoever, and the Chinese e-commerce company got a hand from police in Taoyuan in resolving the situation.

The primary suspect, 36-year-old Mr. Lee, allegedly set up a fraudulent Taoabo operation in April 2018 that expanded to take up a three-story building, according to a police investigation. Authorities began investigating in January. In all, 19 people were arrested and charged with fraud and money laundering, and police seized computers, UnionPay cards.

The operation targeted Chinese citizens, attracting at least 30 victims and collecting more than NT$50 million (US$1.6 million). One victim handed over RMB 5.9 million (US$871,000), Apple Daily reported.

Police said the house hid the operation using empty cardboard boxes to show as “goods” to be shipped. Mr. Lee recruited staff to pose as Chinese public officials, including Public Security Bureau officers, who contacted Taobao users and claimed that they were investigating money laundering cases. They demanded that the users provide access to bank accounts or pay a “deposit” for oversight by the authorities. The group then transferred the funds to their own bank accounts.

The case that tipped off Taiwanese authorities involved a Chinese bank official who transferred about RMB 500,000 to the group. After the group continued to withdraw money from the bank official’s account, he realized that it he had been deceived and contacted police. Taiwanese authorities received the report from China and began investigating the case.

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