Chinese Court Sentences 10 for Aiding Telecommunications Fraud, Recovers Over 1 Million Yuan

Mars Finance reports that the Jinchang Intermediate People's Court in Gansu province, China, recently sentenced ten defendants to prison terms ranging from ten months to a year for the crime of aiding information network crime. The court successfully recovered over 1.19 million yuan in illegal gains.

The report states that in 2022, Shen, seeking illegal profits, purchased computers, IoT cards and other equipment. He recruited Li, Chen and two others to join his operation. They then rented properties in Hefei, Anhui province, and established a USDT (Tether) trading studio. Using the Telegram messaging app, they created illegal off-exchange trading groups and profited by buying Tether at a lower price and selling it at a higher one.

Despite knowing that the USDT they received originated from online gambling and telecommunications fraud, the five individuals continued to facilitate payments between Tether and Chinese yuan at “high exchange rates” for fraudsters. Shen also connected with downstream “currency merchants” like Li, who then used payment methods instructed by upstream criminal figures to settle payments through Alipay, WeChat, and bank deposits.

By the time the case was investigated, the defendants had earned over 880,000 yuan. Over 5.9 million yuan was traced to the accounts used for Tether trading, which was stolen from over 10 victims in Yongchang County, including Meng, who were defrauded while investing in virtual currencies and participating in online "brushing orders" scams.

The court ruled that the defendants' actions of using virtual currency trading to facilitate the transfer of funds for telecommunications fraud went beyond simply operating a virtual currency business. These actions were deemed a key part of the full-chain crackdown on telecommunications fraud and thus warranted punishment.