Leading Chinese Shopping Sites Seen as Money Laundering Vehicle for Gamblers
16 Sep 2020

Money launderers are exploiting some of China’s top online shopping websites to transfer billions of dollars to offshore gambling companies, the Financial Times reported Wednesday.

Individuals seeking to circumvent the nation’s capital flight restrictions, including to gamble online, have been placing fake orders on Pinduoduo and other Chinese shopping platforms, the newspaper said. Following the placement of the phony orders, a corresponding amount is credited to their offshore gaming accounts, according to the FT.

In recent months, Chinese law enforcement officials involved in arrests tied to the alleged scheme have said that at least $2.06 billion was laundered to offshore gambling websites through fake purchases and other means. The People’s Bank of China confirmed that it is investigating the cross-border transfers, the FT reported.

In one instance, police in Wuxi found that 600 million fake packages had been added to courier firms’ tracking systems by company employees tied to the alleged e-commerce scheme. Many of the same tracking numbers appeared in money laundering cases in two other Chinese cities, where more than 7-billion renminbi is believed to have been illicitly moved to offshore gambling sites, according to the report.

Ni Shiyuan, a police officer in Wuxi, told the FT that the government needs to “urge the related platforms, especially new social ecommerce platforms, to strengthen internal controls”.

A spokesperson for Pinduoduo told the newspaper that “gambling syndicates operating under false pretences on ecommerce platforms is an industry-wide problem”. The company has given authorities over 1,000 leads related to the allegations, leading to the arrest of over 200 suspects, it said.

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