Police in Beijing's Shijingshan District have disrupted a sophisticated cross-border telecom fraud operation, freezing 780,000 yuan in criminal proceeds and returning the funds to those defrauded. Disclosed on September 24, the case exposes an evolved variant of the long-running “impersonating law enforcement” scam — one now aimed specifically at Chinese citizens residing overseas, from students to family members accompanying them abroad.

The investigation was triggered by an anti-fraud alert involving a 53-year-old Beijing resident, identified only by the surname Liu, who was staying abroad as an accompanying family member. Liu at first denied having been deceived, but relatives back in China told police he had urgently demanded large money transfers without explaining their purpose. Following the money trail, investigators discovered that funds received by Liu were swiftly split into multiple transfers to two unfamiliar personal accounts — both belonging to Chinese students studying overseas.

After persistent inquiries, one of the students, a woman located outside China, admitted she had been contacted by callers impersonating Chinese police officers. The fraudsters falsely claimed she was implicated in a criminal case, demanded payment of bail money, and coerced her into cooperating with a staged online investigation. More than 800,000 yuan was moved into her account by the criminal group, which then threatened and induced her to convert the funds into USDT stablecoins through a third-party payment platform — effectively turning her into an instrument for laundering criminal proceeds. USDT is a US dollar-pegged stablecoin whose transfers settle near-instantly across borders without passing through conventional banking channels — a profile that regulators and blockchain analytics firms have repeatedly flagged in money-laundering schemes.

Police concluded that Liu and both students were victims of the same ring. The scheme displayed what investigators described as “multiple scams within a single case, with victims serving as money laundering channels for one another”: the fraudsters routed illicit funds through the overseas accounts of several victims via layered transfers, greatly complicating tracing and detection. After a week of intervention and explanation of the case details, officers persuaded Liu and the two students to recognize the deception, and the frozen 780,000 yuan was returned to Liu through the fund interception mechanism — the emergency freeze-and-return channel at the core of China's telecom-fraud response, built to intercept suspicious transfers before they can be dissipated across borders.

Fake Arrest Warrants and Sustained Psychological Pressure: How the Trap Worked

According to case investigators, Liu had been abroad barely a month when he took a from scammers alleging that someone had used his identity to obtain a foreign phone number at an airport in a southern Chinese city and had used it to mass-send more than a thousand illegal messages. The call was then transferred to a purported police hotline, where fraudsters staged fake law enforcement scenarios over video calls and fabricated a case claiming Liu was involved in an international fraud ring that had laundered more than 5 million yuan through bank cards registered in his name.

The criminals maintained daily video contact to “update” him on the fictitious investigation, applied sustained psychological pressure, and produced forged arrest documents demanding over 1 million yuan in bail to clear his name.

Investigators note that, compared with conventional scams impersonating police, prosecutors, or courts, this variant is markedly more deceptive and damaging: it defrauds multiple victims in a single operation, coerces some of them into becoming laundering instruments, and moves funds across several countries through complex transaction chains. The underlying script is a long-documented one — Chinese authorities have repeatedly cautioned overseas students and residents that fabricated warrants, staged video interrogations, and bail demands are hallmarks of impersonation scams — but layering a stablecoin conversion step and victim-to-victim fund routing on top of it is what sets this case apart.

Police have issued a warning to Chinese students and family members overseas that any unsolicited call claiming a person's phone number or bank cards are linked to criminal activity — and demanding online cooperation, bail payments, or deposits — is a telecom fraud attempt. Authorities advise against trusting unknown callers, making online transfers, or disclosing personal account information, and urge anyone who encounters suspicious contact to verify immediately with family in China or by calling the emergency number 110. The case also underscores why Chinese anti-fraud campaigns have concentrated on cutting off the money-movement channels fraud rings depend on: here, the laundering step worked only once yuan was converted into USDT through a third-party payment platform — the same junction where payment-channel compliance and transaction-monitoring controls apply.

Source: Metaverse Post