Chinese police have arrested 16 people accused of blackmailing companies by pretending to be Communist Party or government officials and threatening to post damaging information about them online, a state news agency reported today.
The four groups were accused of operating 11 websites that said falsely that they were run by the ruling Communist Party or government, according to the Xinhua News Agency.
It said they were involved in more than 120 cases and collected a total of more than 3 million yuan (USD 500,000).
One suspect had help from a local official in the eastern province of Jiangsu who tipped him off when violations by companies were found by regulators, Xinhua said, citing an announcement by the police ministry.
The man would pretend to be a ruling party discipline official and demand money not to publicise the problem. "I just wanted to make some money through reporting stories with negative issues and attracting online visitors," the suspect, identified as Zhong Wei, was quoted as telling police.
Zhong used fake business cards and documents to masquerade as a ruling party discipline official, Xinhua said.
Other companies paid hush money even though they knew the reports about them were false due to fear their reputations might be hurt, it said.
"We've been working so hard to establish a good image of our enterprise, so we'd rather spend money on 'peace' even though their stories were purely fabricated," a real estate company manager was quoted as telling Xinhua.
Other suspects include a schoolteacher who wrote the phony news items and an engineer who managed websites.
