With its controls on foreign currencies, the practice of their illegal exchange in China is decades old. But now it’s all being caught up with some people whose 200 million yen scam was operating in Shanghai and beyond, including our own Jiangsu.
But first, a little backstory. This correspondent lived in Shanghai from 1993 to 2003. During this period, it was common for foreigners to be approached, especially near the Bund, by individuals seeking to acquire foreign currency.
Usually called “change-a-money?” guys, because of their friendly welcome, the idea was that they would give you a better rate for your dollars, deutschmarks or dinars than the bank. Then they just raised the rate and sold the money to the Chinese, who at that time were not allowed to buy currency. They were also looking to sell contraband to foreigners, but that’s another story.
Most of these guys were small, but others found they were able to turn such a side business into a major operation. Here, in 2022, however, a group of them have been arrested by Shanghai authorities after their illegal currency exchange business has managed to generate 200 million yen in revenue over the years.
The city’s Pudong police found that the main suspect, a Mr. Cai, was suspected of operating an illegal currency exchange network and making huge profits. Cai was at the heart of what the police dubbed “exchange banks”.
It emerged that Cai, who on paper runs a craft workshop, was previously engaged in clothing transformation. In order to expand his business, he would also sell Chinese-made clothes overseas, reported The paper this morning, October 24.
As he conducted more foreign trade, Cai gradually familiarized himself with some foreign currency exchange procedures. But he was also becoming dissatisfied with the mere production of clothes.
Soon, he was looking for overseas Chinese in dire need of foreign exchange, as well as traders engaged in foreign trade he knew, to put the two together and solve the problem.
Investigators found that Cai had in fact engaged in illegal trading activities in several Chinese provinces, including Guangxi, Jiangsu, Zhejiang and others.
On September 14, law enforcement officers traveled to Jiangsu, among other places, to arrest those suspected of involvement in the case. They managed to capture 11 individuals, including Cai himself. Investigations are ongoing.