China blames Taiwan criminals for surge in telephone scams

Beijing/Taipei: China is battling an explosion of telecoms fraud that has cost billions of dollars in financial losses and driven some victims to suicide, according to authorities in Beijing who say criminal gangs based in rival Taiwan are behind many of the scams.

Chinese state media has blamed weak punishments in the self-ruled island, and reported that Chinese-speaking fraudsters recruited in Taiwan were increasingly setting up operations in East Africa or Southeast Asia.

Despite political tensions, the two sides have in recent years cooperated on investigating such scams, but Taiwan says mainland authorities sometimes do not provide enough evidence for them to do anything.

"We are a democratic, rule of law country," said Chang Wen-yuan, a squadron chief with the Criminal Investigation Bureau, Taiwan`s top investigative agency.

"In this respect, we emphasise the proof or lack of evidence. You can`t just say, `today media reports the person committed a crime,` just like that."

Chang was speaking after China slammed Taiwan at the weekend for freeing 20 suspects deported to the island from Malaysia in a telecoms fraud case. Most were re-detained on Thursday, Taiwan prosecutors said.

TYPICAL OPERATION

While many of the reports in Chinese state media cannot be independently verified, the scale of the problem was underlined by another spat that erupted earlier this month when Kenya deported 45 people from Taiwan suspected of involvement phone fraud to China, prompting accusations of kidnapping from Taipei. 

Chinese police said the case was typical of such operations, which often target the elderly, students or unemployed and involve a caller posing as some kind of government official.

According to details provided to state media, robotically delivered, pre-recorded messages were sent to people in mainland China claiming there was a problem with their medical insurance.

Those who responded were put through to one of multiple lines in a house in a Nairobi suburb, state news agency Xinhua said, where a bogus police officer following an elaborate script would tell the victim their bank accounts had been compromised and convince them to transfer money to a "safe" account.

Scammers have also been know to fake arrests or abductions of family members, or to try to convince victims that money was needed in legal disputes involving relatives.
China`s Public Security Ministry did not respond to a request for comment.

ARRESTING "MULES"

Chinese authorities registered 590,000 telecoms fraud cases in 2015, according to Public Security Ministry statistics cited by state media, up from about 100,000 in 2011, leading to losses of 22.2 billion yuan ($3.4 billion).

On average, more than 10 billion yuan ($1.5 billion) is swindled out of the mainland to Taiwan by telephone scammers every year, the official Xinhua news agency has reported. 

Since 2011, Taiwan and the mainland have cooperated in investigating telecoms fraud in Indonesia, Cambodia, Philippines and other countries, arresting more than 7,700 suspects, including 4,600 from Taiwan, Xinhua said.

"Most of the people they are arresting are the mules," said Lennon Chang, a criminologist and expert in telecoms fraud at Monash University in Melbourne. "They are not the real leaders or heads of the criminal organised syndicates."

Chang said that telecoms fraud took hold in Taiwan in the early 1990s, before a crackdown prompted scammers to shift operations to Xiamen, a port in southeastern China that is just a few kilometres from the Taiwan-controlled island of Kinmen.

There, fraudsters could pick up Taiwan mobile phone signals to call Taiwanese victims, hiding behind the lack of law enforcement cooperation across the Taiwan Strait.

Later they began targeting the mainland, said Chang, but as the authorities in Taiwan and China began to collaborate the gangs were pushed to third countries, aided by advances in technology and moving frequently to make evidence collection harder.

TRANSNATIONAL RINGS 

Chinese state media have reported harrowing tales of the victims of such scams.

The People`s Daily website reported one case in January in which a man from the central province of Henan who transferred 10,000 yuan ($1,500) to fraudsters hanged himself outside of a branch of the Agricultural Bank of China after the bank and police were unable to help him recover his money. He had been convinced to invest in a fake business.

Official Chinese news outlets have also run stories contrasting sentences in China, where life terms have been meted out for telephone fraud, with jail time of just a few years for similar crimes in Taiwan.

"...Because of Taiwan`s generally light penalties for telecoms fraud ... many suspects are not severely punished or not convicted," Xinhua said in an April 15 report.

Hong Chia-juan, a chief prosecutor in Taichung in central Taiwan, said in the past three to four years the district had investigated with China cases involving more than 970 mostly Taiwanese people suspected of telecoms fraud in third countries.

He said sentences for fraud in Taiwan ranged from one to seven years for each victim harmed, up to a maximum 30 years. Life sentences in China were often commuted after a few years for good behaviour, he added.