Five arrested in $28M China Internet scam

By Staff and reports

HONG KONG, China -- Police arrested five people in what could be China's biggest yet Internet fraud case, involving $28.5 million, according to a Xinhua news report.

Through a front company called Digital Dragon, the scam artists told people they could earn money by clicking the banner ads on the company's Web site if they first purchased a membership card for $46.

They were told they could earn $0.036 by clicking once on a banner ad, and that they could only click 33 times a day.

Digital Dragon runners Lin Jiexiong and Zhang Guiling were trying to withdraw money from a bank in Guangzhou and were carrying $43,000 on July 5 when police took them into custody, where they remain, the Xinhua news agency reports.

Three others were arrested on the same day.

At its height, Digital Dragon shipped 10,000 to 30,000 cards a day in 30 provinces and cities, according to Xinhua.

Police grew suspicious of the firm when it took in $120,000 in revenue a day, which the operation claimed was revenue from placing advertisements for third parties.

After seizing assets and shutting down offices in Beijing, Shanghai and Henan province, police concluded that Digital Dragon had no way of recording the clicks on its Web site.

Reuters contributed to this report.