Chinese police crack US$78 billion multinational gambling syndicate
Complex web of deeply buried sites requiring logins and security codes from a server in Taiwan had more than a million registered gamblers in China
PUBLISHED : Tuesday, 17 November, 2015, 1:25pm
UPDATED : Tuesday, 17 November, 2015, 10:05pm
Mimi Lau in Guangzhou
[email protected]
Police escort a suspect during the nationwide operation, Photo: China Police Daily
Police in China have cracked a multinational online gambling syndicate worth more than 500 billion yuan (HK$608 billion or US$78 billion) that served nearly a million registered members on the mainland, local media reported.
Planning for the massive crackdown – code-named Operation 109 – started last year. Despite a large number of arrests in July, the police action only came to light when it was announced by the Ministry of Public security today.
According to the ministry, the syndicate had a complex structure with overseas divisions overseeing more than 500 gambling websites targeting mainland gamblers,The Beijing News reported.
The gambling websites disguised as closed websites such as email, work or financial systems requiring log-ins.
Its main server was in Taiwan while Cantonese and Putonghua-speaking customer service staff were located in Hong Kong, Thailand and the Philippines.
Hong Kong police said it would not comment on individual cases, but added it worked closely with mainland and overseas law enforcement agencies.
“These websites appear to be mail box log-ins but they don’t come with registration function. From our data analysis, every sign is pointing to a professional team working in the background,” said Peng Zhihong, from the Yueyang Public Security Bureau’s internet crime investigation unit in Hunan province.
Police said the suspects used fake identity cards and “illegitimate” mobile phone cards to created false identities, and regularly disposed of computer and communication equipment, which made investigation difficult.
At any time, more than 120,000 registered gamblers from the million or more who had been given credit to gamble. Police estimate websites generated bets of more than 500 billion yuan.
According to the report, winnings were paid into gamblers’ bank accounts. Likewise, gamblers were required to pay losses to the sites’ bank accounts. Those who failed to do so faced swift retribution from hired men.
The gambling websites, which ran illegal lotteries, were developed and maintained by a 39-year-old man surnamed Xu from Chaoshan in eastern Guangdong, while a Shenzhen-based internet technology company who provide coding and website design to the server in Taiwan.
Xu rented most of the gambling sites to smaller syndicates, which operated as companies, for between 30,000 to 50,000 yuan a month.
It is believed the rental income alone was worth 13 million a month to Xu, on top of the takings he received from the online casino that he operated by himself.
Each of the tenant syndicates had shareholders, who in turn had their own agents to develop a customer base – similar to a multilevel marketing scam – Shanghai-based news papet Thepaper.cn reported.
Customers accessing any of the gambling websites were required to log-in, bypass a search interface, then enter more safety codes that lead to a navigation interface and selection menu before placing their first bet.
The interface to all websites could be changed instantly in a security breach was detected.
Police made their first arrests in July, 84 in total, in several cities in Guangdong province, including Shantou, Jieyang, Shenzhen, Dongguan and the capital, Guangzhou.
Another 12 gambling locations such as private homes were also raided and accounts at 14 different banks were seized.
Xu, the syndicate’s mastermind, fled to Jieyang, where he was arrested in September.
Confiscated computer equipment and other evidence seized in the operation. Photo: China Police Daily
