Expat couple operated illegal personal- data-mining business
A Briton and a US citizen were arrested on suspicion of illegally selling personal information in Shanghai.
It was the first police case that involved a company registered by foreigners on the Chinese mainland whose core business was investigations, which the Ministry of Public Security alleged were illegal in a notice on its website on Tuesday.
Briton Peter William Humphrey and his American wife, Yu Yingzeng, were arrested on Aug 16.
They founded ChinaWhys, an investigation firm, in Shanghai’s Pudong New Area in 2004.
Their clients were multinational companies, including manufacturers, financial institutions and law firms, police said, without providing details.
According to police, Humphrey, 57, and Yu, 60, bought and collected personal data about Chinese citizens — such as addresses, names of family members, travel and property and car ownership — paying 800 yuan ($130) to 2,000 yuan per household since 2003.
They compiled the information in reports and since February 2009 sold these to clients for hundreds of thousands of yuan each.
Police said the couple made 6 million yuan profit annually on about 100 orders.
At least 10 reports Humphrey and Yu prepared contained information infringing on Chinese citizens’ privacy rights, police said after raiding the office.
“We obtained the personal information by illegal approaches sometimes. I’m deeply regretful and apologize to the Chinese government,” Humphrey said on China Central Television in fluent Mandarin on Tuesday.
Humphrey, managing director of ChinaWhys and a former journalist with Reuters news service, was a veteran investigator with 14 years’ experience as a corporate detective focusing on white-collar crime prevention, fraud investigation and crisis mitigation for multinationals in Asia, according to the company’s website.
He was the founding president of the Shanghai chapter of the Association of Certified Fraud Examiners, the world’s largest anti-fraud organization and premier provider of antifraud training and education, and a member of the American Society for Industrial Security.
Yu, general manager of ChinaWhys, had worked in the United States, Hong Kong and on the Chinese mainland in industries including telecommunications, medical products and retail over a 25-year career, according to the website.
The couple previously registered a business consulting company in Hong Kong in 2003, which had no permanent office or employees.