15 suspects of crime ring arrested for using Pinduoduo to launder money

Pinduoduo has reported more than 1,700 suspicious shops to relevant authorities in the first five months of 2019.

Photo credit: KrAsia

Local police in Guangdong Heyuan recently cracked down a crime ring and arrested 15 suspects for allegedly money laundering on social commerce platform Pinduoduo.

In a statement on its WeChat account, local police said Pinduoduo, China’s largest social commerce platform, had provided “immense support” in aiding the investigation process.

The police confiscated multiple mobile phones, bank cards and other relevant items. The money laundering case involved transactions worth more than RMB 30 million (USD 4.2 million).

The crime ring set up multiple online shops on Pinduoduo and faked transactions to launder illegal proceeds.

The ring leader, a 33-year-old local man, hired technical staffs to set up an automatic maintenance system which allowed them to handle a large number of orders from multiple shops. Another suspect, surnamed Feng, was in charge of finding identity information in bulk, used to set up bank accounts to facilitate the transactions.

People who wished to launder their money would place fake orders in their shops and pay through Pinduoduo’s platform. Once the orders were completed, these “customers” would be refunded through other payment methods for their orders and Zhang and his crime ring would be rewarded with commissions.

An unnamed Pinduoduo spokesperson said the platform is under increasing risk assessment pressure because of its rapid growth.

As of the end of May, Pinduoduo had reported more than 1,700 shops and nearly 19,000 suspicious items on its platform to the relevant authorities this year.