Bank Accounts Frozen After Selling Watches and Gold Bars in Mainland China

Gold illustration.(Chen Bozhou/Dajiyuan)

[November 5, 2024] The term "distant fishing" refers to an unusual enforcement tactic where, due to financial strains across various regions in China, local police from economically weaker areas travel to other provinces to conduct raids. They fabricate criminal connections for businesses, seize private enterprise assets across provinces, and now, through supposed telecom fraud investigations, target online sales by individuals. Recently, a case in Shaoxing, Zhejiang, involved a man who sold a watch for 400,000 yuan (RMB). His bank account was frozen upon receiving the money, and he was subsequently detained by police on suspicion of telecom fraud.

Suspected Police Entrapment; Victims Helplessly Protest as “Distant Fishing” Expands

On October 31, a woman in Shaoxing, Zhejiang, posted a video holding her ID card, explaining that on June 18, her husband sold his Audemars Piguet watch due to a financial shortfall in his business. Right after receiving payment, his bank account was frozen. Two days later, the account remained frozen, and her husband was detained by police from Shiyan, Hubei, and taken to the local police station. Hubei authorities alleged that the 400,000 yuan her husband received was linked to telecom fraud, and he became a fugitive suspect.

In her video, the woman expressed her distress:

“When I heard this, I was on the verge of tears. We are honest people, working hard to earn an honest living. Why did this happen to us out of nowhere?” she said. That same day, she transferred 400,000 yuan to the Dongyue Branch of the Shiyan Public Security Bureau in Hubei, and her husband was released that evening.

“We were just trying to sell a watch to help with household expenses. Now, we have neither the watch nor the money, and it’s been 140 days since then. I don’t know how we’ve endured this time,” she said.

Netizens reacted: “Has ‘distant fishing’ reached individuals now? From now on, let’s all use cash or barter.” “So now they can just call it telecom fraud and rob you.” “This is outright robbery! Even an ordinary person selling a watch is targeted.”

Recently, numerous cases have emerged in mainland China where individuals selling luxury watches faced police detention, and the proceeds were seized.

In mid-October, a woman in Zhejiang sold a second-hand Rolex for 148,000 yuan. Her bank account was immediately frozen, sparking widespread attention online.

Authorities in Guiyang, Guizhou, informed the woman that her transaction involved telecom fraud, and she was placed on a wanted list. Later, police in Wenzhou cleared her of any criminal involvement and issued a written statement. However, Guiyang police demanded she return 140,000 yuan as “illicit funds” before releasing her on bail.

On October 23, Mr. Ma from Nanjing told Modern Express he had a similar experience. In March, he sold a Rolex watch, and two payments were flagged as fraud-related. One payment of 200,000 yuan was frozen by police in Danyang, Jiangsu, for four months before it was seized, while another payment of 256,000 yuan is still undergoing the unfreezing process by Jinan police in Shandong.

Mr. Ma expressed frustration, saying, “If there’s fraud involved, we’re willing to cooperate with an investigation, but they shouldn’t just take the money without my consent.”

On October 25, a Hangzhou-based jewelry store owner who operates under the online name "Bobo's Gold Vault" posted a video stating she had been targeted by “distant fishing.” After selling two investment gold bars via WeChat, her account was frozen by Shaanxi police, who demanded the funds in her account be seized for the freeze to be lifted.

Near 10,000 Businesses in Guangzhou Impacted, Guangdong Report Reveals

The issue of irregular cross-provincial enforcement by the police has caught official attention recently.

On October 16, China Times disclosed findings from a Guangdong provincial report issued in April by the Provincial Situation Research Center, revealing that cross-provincial police actions have surged in cities like Guangzhou, Shenzhen, and Dongguan in the Pearl River Delta. Since 2023, nearly 10,000 companies, mostly private, have been affected in Guangzhou alone. Many of these cases exhibit clear profit-driven motives for law enforcement.

A case cited involved police from a Chongqing county. They charged a company with fraud after a customer claimed a “herbal bath sachet” was ineffective. Over 300 officers were dispatched to Hangzhou, arresting 155 people and seizing assets totaling 200 million yuan.

In Henan, police from a county initiated fraud charges against a Shenzhen auction house after a so-called “collector” reported it for charging a 5,000-yuan appraisal fee per industry norms. Forty-seven employees were detained, and the court imposed heavy fines, confiscating millions of the company’s assets.

In Zhangjiajie City, Hunan Province, Liu, the head of a police station in Cili County, explicitly told a corporate representative of Wuhan-based Yuancheng Group that his purpose in handling the case was “to get some money, around 10 or 20 million yuan.”

Guangdong-based One Health Group also fell victim to "distant fishing." This company reported 2.423 billion yuan in revenue in 2022 and applied for an IPO in Hong Kong in mid-2023. In October 2023, over 1,600 police officers from Jiaozuo and Shangqiu in Henan Province raided One Health’s subsidiary offices in Guangzhou. Although the alleged amount involved was only around 600,000 yuan, 64 accounts linked to the subsidiary were frozen.

As a result, One Health was forced to withdraw its Hong Kong listing application, and its operations have since been paralyzed due to funding issues, halting production and business.

“Distant Fishing” Intensifies, Seen as a Result of High-Level CCP Endorsement

With increasingly strained local finances and the incentive to retain fines within local budgets, many regional public security departments are eager to engage in "distant fishing."

On October 8, National Development and Reform Commission Director Zheng Shanjie stated that “irregular cross-provincial law enforcement” and profit-driven enforcement are prohibited, as are indiscriminate fines, inspections, and seizures. That same day, a roundtable hosted by Premier Li Qiang emphasized the need to stop profit-driven enforcement.

However, U.S.-based economist David Huang told Epoch Times that the central government in Beijing has long been aware of such actions, but relies on local governments to enforce policies and uses the police to maintain regime security. Consequently, it is reluctant to crack down on local governments and law enforcement. Given local financial pressures, the public security apparatus is dependent on local budgets for funding.

Exiled rights lawyer Wu Shaoping stated that while CCP leaders have issued statements against profit-driven law enforcement, no officials have been removed from their posts or prosecuted. On the contrary, some are even rewarded for generating revenue, effectively encouraging this behavior across regions. Wu described it as a result of CCP high-level tacit endorsement.

Reported by: Lian Shuhua