The Communist Party newspaper Global Times said that Gui Minhai had admitted to selling more than 4,000 books by mail despite knowing they had not been approved by China's publications authority.
Gui, who holds Swedish citizenship, was one of four people connected with Hong Kong's Mighty Current publishing house who went missing in October.
He resurfaced in January, making a tearful appearance on Chinese state TV to say he surrendered for fleeing the country in violation of the terms of his suspended sentence over a 12-year-old fatal drunken driving case.
The three others, Lui Por, Cheung Chi Ping and Lam Wing Kee, are shareholders or employees of the company.
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Gui disappeared from his vacation home in Pattaya, Thailand, while the three others went missing in mainland China.
Hong Kong police also said they received a handwritten letter from a fifth missing person, editor Lee Bo, in which he purportedly rejected a request to meet with them.
Lee, a British citizen, disappeared on December 30, and many suspect he was abducted by mainland Chinese security agents operating in Hong Kong, which would be a breach of the "one country, two systems" principle Beijing agreed to when it took control of the city from Britain in 1997.
Mighty Current's books on political scandals and intrigue involving China's communist leaders are popular with mainland Chinese visitors to Hong Kong, despite their being banned on the mainland.