The Number One Internet Porn Case in China

(China Business News via Chinese News Net)  By Zhao Jie (趙傑).  September 19, 2006.

[in translation]

Erotic June Sky's boss Chen Hui and eight others were charged with "disseminating pornographic material for profit."  Chen Hui had only received elementary education, and yet he headed four large-scale pornographic websites that earned several tens of millions of RMB each year.  This case is the most comprehensive case of Internet pornography in mainland China.  A renowned criminal law expert wondered if the Ministry of Public Security had the investigative skills and techniques for the job.

Shi Xiaoming told this reporter that after the case is completed, they will recruit new talents with many methods.  But his headache is that such people are very hard to find.  "The recent graduates have the technical skills, but experience can only be accumulated over time.  Meanwhile, those who have investigative skills are technically unqualified."  He believes that Internet criminal acts are a new form of criminality which poses a severe challenge to the police.

On August 28-30, the case known as "the number one Internet porn case" was heard in the Shanxi province, Taiyuan city Intermediate Court.  Erotic June Sky's boss Chen Hui and eight others were charged with "disseminating pornographic material for profit."  The surprising thing was the Chen Hui had only received elementary education, but he was heading four large-scale pornographic websites: Erotic June Sky, Erotic Coast, Paradise on Earth and Chinese Eden Forum.

The public prosecutor was Zhao Zhengbin of the Taiyuan city procuratorate.  He said: "If found guilty of 'disseminating pornographic material for profit,' Chen Hui may be sentenced to life in prison, while the other co-defendants may be sentenced to anywhere between three to ten years in jail."  At present, the trial is basically concluded and the panel of judges are evaluating the evidence.  On September 13, an official at the Taiyuan city Intermediate Court told this reporter: "The court will issue its verdict for the first trial in October."

Zhao Zhengbin said, "(The Erotic June Sky case) can be said to the number case of Internet pornography in China."  According to information, the Erotic June Sky website has 619,611 registered users with a hit rate of 11.65 million for its 44,812 pornographic photographs and 125 pornographic movies.  Its scale is unprecedented.  From the viewpoint of the investigation, this is the most thorough case on Internet pornography in China.

This time, the police not only arrested the operators but they also obtained the passwords to the servers and therefore thoroughly took down the websites.  This is a breakthrough compared to before.  "It is doubtful whether the management level of the Chinese government and the investigative techniques of the police are higher than the criminal elements."  While affirming the thoroughness of the investigation in this case, a renowned Chinese criminal law expert has doubts about the investigative skills and techniques of the Ministry of Public Security.

One difficulty in solving the Erotic June Sky case was that the website rented overseas serves in order to avoid scrutiny by the Chinese police.  This is a common thing that the Chinese Internet criminals do.  This expert believes that the technical skills inside China are relatively backwards and the Ministry of Public Security has invested only limited money and manpower, which are not enough to supervise and stop Internet crime, which includes the pornographic websites.

One of the direct case investigators, Taiyuan city Public Security Bureau Internet Monitoring Division captain Shi Xiaoming told China Business News that Chen Hui's server was rented from another suspect, Zhang Bin.  Zhang Bin had rented one hundred servers in the United States, and Chen Hui was only renting a small number of them from him.

"According to our understanding, not all of Zhang Bin's servers were used for pornographic websites.  The other servers were used for many purposes, such as lottery gambling," another case investigator who did not wish to disclose his name told us.  Since gambling activities were not within the jurisdiction of Taiyuan city, they forwarded what they have learned to the appropriate authorities.

Since these servers are all located in the United States, they may have been temporarily blocked in China but that does not preclude the possibility that others may continued to operate them for criminal purposes.  During the news gathering, the reporter learned that the public security and procuratorate were all worried: "We have done away with the Erotic June Sky website, but we cannot stop the American side from continuing to rent out servers to criminal elements."

This legal scholar who does not want to disclose his name said that the overseas servers undoubtedly increased Chen Hui's ability to manage his network.  Apart from criminal activities such as pornography and gambling, the Internet criminals also engage in intellectual property rights violations, e-commerce fraud and intruding into other people's websites, home pages and e-mail.  "But the two aforementioned crimes are different from the latter crimes, because the latter can be accomplished without renting an overseas server."  Shi Xiaoming told our reporter.

Zhao Zhengbin told our reporter: "According to the investigation, Chen Hui and others obtained profits in excess of 200,000 RMB, with Chen Hui personally earning 50,000 RMB."  According to an investigator familiar with the case, Chen Hui's income should be far higher than this figure.  He suspected that Chen Hui might have spent most of the loot or else moved it overseas, and therefore the true picture of illegal gains is difficult to tell.

According to the investigation, Chen Hui's pornographic websites were able to attract about 200,000 members initially through free registrations.  Later on, new members had to pay a fee of 199 RMB (or 266 RMB) per year, or a permanent membership fee of 666 RMB (or as much as 3,999 RMB for the highest category).  In addition, the website was obtaining monthly advertising revenues between 1,000 to 3,000 RMB per month.

Based upon an analysis of the registration fees, advertising revenue and hit rates, the Chen Hui organization should be earning profits of several tens of millions per year in theory.  The investigator said: "The website management was very strict and everybody had to follow the regulations.  The payment channels were strictly controlled."  According to information, the website management personnel were classified into forum administrators, super-forum masters and forum masters, whose roles were clearly delineated.

Chen Hui spent 1,000-3,000 RMB for each server that he rented in the United States.  This is about two to four times higher than the price of a server in China.  Shi Xiaoming explained: "The technical level of overseas servers is higher.  A criminal element can use many IP addresses on the same server, and he can switch among them anytime.  They are more mobile and better at preventing detection."

This is the reason why most criminal elements rent overseas servers, whereas normal Chinese people and businesses rent Chinese servers.  During the process of news gathering, the reporter learned that the "collection of evidence" was the problem that gave the investigators the most headache, and one key problem was that the required hardware was not available.

From the time that the tip about Erotic June Sky first came in on June 21, 2005, the case went on for fourteen months.  The information was finally handed over to the Taiyuan city Intermediate Court on August 29, 2006.  Shi Xiaoming told the reporter: "Collecting evidence on Internet crime is more difficult than other kinds of cases.  To gather evidence on the Internet, the personnel are required to be computer-savvy.  Next, our techniques should be better than those of the criminals, and this should be reflected by our having better equipment than what the criminal elements have."

This case could not be solved by making the public security personnel do more overtime work.  The presence of the hardware infrastructure is extremely important.  Shi Xiaoming said that the Ministry of  Public Security has received more tips on these kinds of operations, but "we can only selectively deal with only some of the cases" because "our manpower and resources are limited."

A worker at the Taiyuan city Intermediate Court Information Center confirmed: "We process very few cases of this type each year."  A leader at the Taiyuan City Public Security Bureau said, "After we received the tip, we conducted a preliminary investigation and we discovered that the mission was far beyond what this bureau can accomplish on its own.  Therefore, we immediately informed the Shanxi provincial Ministry of Public Security."

"When we received the tip, we analyzed the situation and we saw that the case was huge and involved many people at the city and provincial level.  Therefore, we decided to inform the provincial Ministry of Public Security," said the case deputy director Mu Ruxiang, who is the Shanxi province Ministry of Public Security Internet Monitoring Department.  According to our understanding, the case was forwarded upwards not only because the scale was larger, but another factor was that the public security apparatus did not have enough personnel or technical skills to handle Internet crimes.

Shi Xiaoming said: "There are now more than 100 million Chinese netizens, but the ratio of police force is extremely low."  According to information, the Taiyuan city Public Security Bureau Internet Monitoring Department has only about a dozen people, of which there are four persons are in the investigative department.  Based upon the most basic allocation ratio, that center should have at least 25 persons.  A squad member said that this case was successfully solved only be transferring personnel from other city/county public security bureaus and also the Ministry of Public Security served to coordinate.

"This case clearly showed that we do not have adequate staff."  The aforementioned leader told our reporter.  They have reported the situation to their superiors.  "I hope that this case will arouse the interest of the leaders, who may then give more support to the Internet monitoring teams in terms of manpower, resources and money."

Shi Xiaoming told the reporter that after this case is concluded, they will attempt to attract new talents by various means.  But their headache is that such people are hard to find.  "Recent graduates have the techniques, but experience can only be accumulated over the long term.  The people who have the investigative experience are technically ill-qualified."  He believes that Internet crime is a new model of criminality, which poses a tremendous challenge to the police.

On July 19, 2006, CNNIC published its 18th "The Summary Report on the Development of the Internet in China."  There are now 123 million Internet users in China and 7.884 million websites, representing a growth of 19.4% and 19.5% over the preceding year.  The report believes that the Internet in China is growing faster than in all other developing countries, but it is still far from matching what is happening in the developed countries.

On one hand, there are more Internet crimes from year to year.  On the other hand, the ability to solve such crimes is at a standstill.  Shi Xiaoming feels quite troubled.  Compared to the increasing improvement in Internet bandwidth, scope and systems, the facilities at the Internet Monitoring Departments are obviously falling behind.  In order to improve the hardware infrastructure, it will require "investments of tens of millions RMB or at least a few million RMBs."  This seem to be an unreachable figure.

A case investigator said; "The finance department does not understand what we do.  They wonder why Internet work should require expenditures."  But the cases they handle often cover secrets that cannot be disclosed or explained to the outside world.  Without such reasonable explanations, the finance department will not approve.  Shi Xiaoming said, "(Due to the lack of equipment), the problem is that we cannot actively uncover the crimes.  Instead, we have to rely on tips.  Among the tips, we can only select a small number to process."

A police officer who has spent many years on Internet monitoring said that "a small number of leaders do not understand the trend and danger of the increasing growth of Internet crime and therefore we do not get any response to our reports."  Thus, Internet monitoring is falling short.  Furthermore, some of their projects received funding from the central government and the Shanxi provincial government, "but as soon as the local financial department got to them, they took away a large part (almost one-third)."

This police officer said that the problem exists in various places across the county, "and it is worse in economically underdeveloped provinces and cities."  According to information, even as Shi Xiaoming and his Internet Monitoring squad was using the "oldest car in the courtyard" to carry out the investigation, several offices have been set aside to form a new Internet police center.  "Actually, they are doing this all over China, because the danger from various Internet fraud crimes is very high."

On June 21, 2006, a Taiyuan city citizen reported to the city's Public Security Bureau Internet Monitoring squad that when he got on the Internet, he came across a hospital website which turned out to the home page of a pornographic website.  After investigation, the suspect Wang Jianfei who was the Taiyuan forum master of Erotic June Sky was arrested.  On September 21, Wang Jianfei was secretly detained.  At the same time, the case investigators proceeded to Fujian, Guangdong, Jilin, Liaoning, Anhui and Hubei to arrest other suspects.  The principal suspect Chen Hui who was the boss of Erotic June Sky was arrested in Fujian.  It was verified that Chen Hui was also the boss of the pornographic websites Erotic Coast, Paradise on Earth and Chinese Eden Forum.  Erotic June Sky was established in May 2004, with Chen Hui claiming that it was the "first Chinese adult community zone."

As of October 27, 2005, Chen Hui, Wang Jianfei and seven other individuals had been arrested.  On August 29, 2006, the case was heard in the Taiyuan city Intermediate Court.  At the trial, Chen Hui overturned his confession and claimed that he "did not ask others to disseminate pornographic material."  The other defendants admitted that they did so.  As of now, the case is still under consideration and it is estimated that a verdict will be ready in early or middle October.