Alibaba says China police arrest 36 in fraud probe

July 2, 2011 advertising, pictured in Hong Kong, in 2007. Police have arrested 36 people in southeast China following an investigation into fraud on e-commerce site and other websites that duped buyers out of more than $6 million.

Police have arrested 36 people in southeast China following an investigation into fraud on e-commerce site and other websites that duped buyers out of more than $6 million., Alibaba's corporate news website, reported earlier this week the suspects were detained in Fujian province's Putian city in April. John Spelich, the firm's spokesman, confirmed the report to AFP on Saturday.

The people arrested allegedly operated a criminal gang that used fake IDs to open more than 100 "Gold Supplier" accounts on This designation is given to those certified as highly trusted suppliers by the firm.

This allowed the suspects to pose as legitimate companies selling to overseas businesses that source goods through Police said the alleged also used other international trading websites., based in the eastern city of Hangzhou, has grown into one of China's largest Internet companies by matching mainland manufacturers and wholesalers with buyers around the world.

But its reputation took a hit in February when the firm announced the resignation of chief executive David Wei and head of operations Elvis Lee after fraud was uncovered on the site.

Wei and Lee were not involved in the scams but resigned because they took responsibility for "systemic breakdowns" that allowed the fraud to happen, Alibaba said at the time.

But according to the Alizila report, the fraud was "sometimes abetted by employees." But Spelich said Saturday none of the 36 arrested worked at the company.

He added the number of complaints received by the website in June was down 70 percent from February after Alibaba toughened procedures and other security measures.

The report said had refunded $1.9 million to those who lost their money to the alleged scammers.

Explore further: Top Alibaba executives resign after fraud probe

Related Stories

Top Alibaba executives resign after fraud probe

February 21, 2011

(AP) -- Chinese e-commerce giant Alibaba says two of its top executives are resigning to take responsibility after a probe discovered more than 2,000 suppliers had defrauded customers, sometimes with the alleged collusion ...

China's Alibaba teams up with US PayPal

April 27, 2010

Chinese e-commerce firm Alibaba said Tuesday its new transaction platform would accept payments from users of US online payment service PayPal, amid efforts to expand overseas.

China's Alibaba buys US software developer Auctiva

August 25, 2010

The Hong Kong-listed arm of China's e-commerce firm Alibaba said Wednesday it had agreed to buy US software developer Auctiva for an undisclosed sum, accelerating a push into the world's biggest economy.

Recommended for you

Microsoft aims at Apple with high-end PCs, 3D software

October 26, 2016

Microsoft launched a new consumer offensive Wednesday, unveiling a high-end computer that challenges the Apple iMac along with an updated Windows operating system that showcases three-dimensional content and "mixed reality."

Making it easier to collaborate on code

October 26, 2016

Git is an open-source system with a polarizing reputation among programmers. It's a powerful tool to help developers track changes to code, but many view it as prohibitively difficult to use.

Dutch unveil giant vacuum to clean outside air

October 25, 2016

Dutch inventors Tuesday unveiled what they called the world's first giant outside air vacuum cleaner—a large purifying system intended to filter out toxic tiny particles from the atmosphere surrounding the machine.

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

3 / 5 (2) Jul 02, 2011
Alibaba is a G00gle-wanna be but from an evil empire. I will not allow Alibaba content.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.