China Watch Blog

China Watch Blog has learnt that more than 250 investors, including majority of them from China, have been cheated out of millions of dollars in a scheme by an American who led them to believe their investments could enhance their prospects of US citizenship, according to the US Securities and Exchange Commission.

The Shanghai Daily reported, citing the SEC as saying that the man, Anshoo R. Sethi, had created two companies and “fraudulently sold more than US$145 million in securities and collected US$11 million in administrative fees from investors.”

The commission has halted the scheme and filed charges. It has also frozen Sethi’s assets.

“Sethi orchestrated an elaborate scheme and exploited these investors’ dreams of earning legal US residence along with a positive return on their investment in a project that was not nearly the done deal that he portrayed,” said Stephen Cohen, associate director in the SEC’s enforcement division.

“The good news is that we intervened early and stopped him from getting very far, and the asset freeze preserves nearly all of the money invested.”

But the bad news is that Sethi and his companies have spent more than 90 percent of the administrative fees collected from investors despite a promise to return the money to investors if visa applications were rejected.

More than US$2.5 million of these funds were directed to Sethi’s personal bank account in Hong Kong, said the SEC.

It has obtained an emergency court order to protect the remaining US$145 million in investor assets.

It is not known whether Sethi, 29, who lives in Illinois, has been arrested.

Investigations are ongoing, the SEC said.

Sethi’s website, www.anshoosethi.net, is still in service. It says the family hotel development business is three decades old and he “offers nearly 15 years’ experience as a real estate developer and global financier with a focus on hotel development and management.”

The SEC alleges that Sethi misled people that their investments would help them gain them US citizenship through the EB-5 Immigrant Investor Pilot Program, which provides foreign investors with an avenue to US residency by investing in projects that will create or preserve jobs for US workers.

The SEC claimed that Sethi and his companies “made a number of misrepresentations about the project to dupe investors.”

By purchasing interests in Sethi’s companies, the investors were told that they would be financing construction of the “World’s First Zero Carbon Emission Platinum LEED certified” hotel and conference center near Chicago’s O’Hare Airport.

The SEC alleges that Sethi and his companies falsely told investors they had acquired all the necessary building permits and that several major hotel chains, such as Hyatt, Intercontinental Hotel Group and Starwood Hotels, had signed onto the project.

However, none of those hotel chains has a signed agreement to include a hotel in the Chicago project, according to the SEC’s investigation.

China Watch Blog reports that the boss of a state-owned enterprise in south China was suspended from his post on Tuesday due to his part in a luxury banquet last month which flouted the country’s frugality campaign.

Zhou Shaoqiang, general manager of Zhuhai Financial Investment Holdings Co., Ltd, was ordered to undertake self-reflection over public expenditure which exceeded standards, said the Communist Party of China’s discipline authorities in Zhuhai, Guangdong Province, based on a Shenzhen Daily report.

A banquet which Zhou and 16 others had in a local restaurant on Jan. 4 cost 37, 517 yuan (about 5, 974 U.S, dollars), far more than the fake bill of 4, 689 yuan, which the restaurant had claimed under the instruction of Zhou.

The high expenditure “seriously violated regulations at central, provincial and municipal levels and caused an extremely bad social impact,” said the authorities in a statement.

With the consumption of 12 bottles of expensive red wine, the extravagant dinner was first exposed on the Internet and sparked criticism among netizens as the country has recently launched a frugality campaign.

Zhou denied that participants had drunk 12 bottles of red wine, saying only six bottles were drunk and the other six were empty ones for them to learn red wine knowledge.

Results of an investigation conducted by the Zhuhai state-owned assets supervision authorities said the bill was just 4,689 yuan. Netizens expressed doubts about the “frugal” dinner.

However, further probe showed the banquet indeed consumed 12 bottles of red wine, whose prices were 23, 706 yuan in total, said the statement by Zhuhai municipal discipline authorities.

The part of the bill which exceeded consumption standards would be paid by the diners themselves, said the statement.

The discipline authorities of Zhuhai state-owned assets supervision and administration commission were also scolded for their inaccurate probe about the case, it added.

Chinese leader Xi Jinping has urged all official organs to maintain a frugal lifestyle and oppose extravagance.

The recent annual provincial “two sessions”, which referred to the meetings of local legislatures and political advisory bodies, also adopted new frugality moves in food and other respects.

China Watch Blog reports Apple’s revenue may have missed expectations as sales of the iPhone reportedly disappointed. However, data from leading independent digital marketing agency, Greenlight, shows no slump in the number of online searches pertaining to iPhones, in the lead up to Christmas.

In fact, search volumes for the term ‘iPhone 5’ saw a dramatic 594% jump. However, the opposite was true for the term ‘Blackberry’. Just last week, its inventor, Research in Motion (RIM), showed off two new smartphones for its newly built BlackBerry 10 operating system.

According to Greenlight’s ‘Brown Goods Sector Report – Issue 14’, in November 2012, a total of 12 million searches were made on Google UK for Audio & Accessories, Cameras & Camcorders, PCs, Laptops and Tablets, Phones & Accessories and TVs & DVD Players, up 5 million on August 2012 levels.

Phones & Accessories-related search terms proved most popular. They accounted for 53% of all Brown Goods-related queries compared to 32% in August, when searches pertaining to PC’s, Laptops and Tablets dominated (48%).

‘iPhone 5’ search volumes see a six-fold rise

According to Greenlight, the term ‘iPhone 5’ was queried more than 4 million times, accounting for 34% of all Brown Goods-related searches in November, up from August’s 673,000.

In the case of ‘Blackberry’ however, the opposite was true. Greenlight’s data shows search volumes for the term totalled 246,000 compared to 301,000 in August.

Apple knocks Amazon UK off top spot to become the most visible site for Brown Goods

Greenlight also assessed which brands, retailers and review sites were the most visible in both Natural Search* and Paid Media** results and therefore had the greatest share of consideration when UK consumers searched on Google UK for Brown Goods in November.

Greenlight’s Integrated Search league table shows that Apple, which in August lay in fifth place, snatched Amazon UK’s lead to become the most visible website overall. In November, it achieved a dominant share of visibility across both the Natural Search and Paid Media listings – 60% and 72%, respectively.

Whilst Amazon UK was relegated to fourth place, it was one of just three sites that managed to hold on to a spot in Greenlight’s top ten, from August.

China Watch Blog reports that many people are unaware that cyber criminals target mobile devices – or think that putting a four-digit PIN code on their phone is sufficient protection.

But yahoo reports that cybercrime on mobiles is already real. In the UK, 22% of users report that they have received text messages requesting that they click a link or dial a number to access a ‘voicemail’ message – a common attack used by cybercriminals

App stores such as Google’s Play are also filled with ‘fake’ apps – often made to look like real hits such as Angry Birds – which can infest phones with adverts or even run up huge bills calling numbers abroad.

Mobile adware – or ‘madware’ – attacks have risen 210% in the past year, according to figures from Norton.

‘Your smartphone is as sophisticated if not more than your PC,’ says Norton’s director of security response, Kevin Haley. ‘It has all the same information, it’s got your work information and your personal information. It even has financial transactions on it. Why wouldn’t the bad guys target it?’

Safe use of smartphones will come into focus once more on Tuesday, February 5 (that is today), which is the tenth Safer Internet Day.

China Watch Blog reports that China’s telecom users kept expanding in 2012 with phone users across the country totaling 1.39 billion, up 9.4 percent year-on-year, the Ministry of Industry and Information Technology said in a recent report.

Mobile phones users exceeded 1.1 billion in 2012, with 3G users accounting for 20 percent.

Broadband users with speeds of 4 Mbps or above made up 63 percent of the total, the report said.

More than 10,000 villages were added into the country’s telephone coverage and 19,000 more villages had broadband services in 2012.

Telephone services now cover 95.2 percent of China’s villages and broadband services cover 87.9 percent of China’s villages.

China Watch Blog has learnt that Zhejiang authorities found many shark fins sold in the market are artificial products with some containing excessive levels of cadmium, which is a toxic metal.

The industry and commerce department in Zhejiang province conducting a check of shark fin soup, a popular dish often served at luxurious banquets.

It found many restaurants serving artificial shark fins made of edible gelatin and seaweed gum.

Restaurants purchase the “shark fins” at a low price, but they are sold for up to 1-thousand yuan a bowl in restaurants and hotels.

Similar results were found in another investigation by the province’s consumer rights protection agency as no shark was found in any of the soups.

The consumer rights protection agency also found that about one-third of dried shark fin in the province’s markets contained excessive cadmium and methyl mercury.

Experts say excessive ingestion of mercury can harm pregnant woman and the development of the fetal brain and nervous system.

China Watch Blog has learnt that tourism operators in Thailand have called on local authorities on Wednesday to strictly regulate jet ski renters at Koh Samui after four employees of a jet ski operator assaulted and injured a Swiss tourist.

Thanongsak Somwong, chairman of the Koh Samui tourism promotion association, said business owners and tourism operators wanted concerned agencies to impose stronger controls on more than 50 jet ski owners who are operating on Koh Samui’s beaches.

Mr Thanongsak said some operators took advantages or threatened physical attacks. He blamed state agencies for failing to crack down on rogue jet ski owners, resulting in a repeat of the similar incident.

On Tuesday, a 27-year-old Swiss tourist, Buja Kajumai, was reportedly beaten by four men who worked for a jet ski owner at Chaweng Beach. The four accused Mr Kajumai of crashing a craft which he rented from them and asked him to pay for damage. The tourist denied he harmed the craft, and refused to pay. The men reportedly attacked and beat him.

The four suspects have been charged them with physical assault and kept in police custody.

Police on Wednesday went to the scene to question additional witnesses and record information of more than 30 jet-ski owners and employees operating along the Chaweng beach.

In Pattaya, many tourists and expats regard the jet ski scam run by mafia-like operators on the resort town’s beach as the most critical issue for visitors. A similar situation exists in Phuket.

In the scam, people who rent jet skis are forced to pay inflated sums for repairs when they return the craft. The jet skis already have superficial damage before they are rented out, but the customers tend not to notice as the damage is usually on the underside of the craft, obscured by water.

China Watch Blog has learnt that one billion tourists have traveled internationally in 2012 according to the World Tourism Organization (UNWTO), the United Nations specialized agency for sustainable tourism.

This is equivalent to one in every seven people on the planet traveling the world in 2012, up from just 25 million in 1950.

The figure establishes tourism as one of the world’s largest and fastest growing economic sectors, accounting for:

· 9% of global GDP (direct, indirect and induced)

· 1 in every 12 jobs worldwide (direct, indirect and induced)

· US$ 1.2 trillion in exports a year

· 6% of world trade

· 8% of the exports of least developed countries

For developing countries, tourism brings much needed foreign exchange and investment. Tourism has also proven an extremely resilient sector, despite uncertain economic conditions, and is key to supporting the global economy in the current challenging times.

UNWTO forecasts point to the one-billionth tourist arriving somewhere in the world in December. UNWTO has chosen 13 December as the symbolic arrival date of the one-billionth tourist.

To celebrate, UNWTO has been running a global campaign to raise awareness of the power of one billion tourists to affect positive change by making small changes to their travel behaviour. The campaign, One Billion Tourists: One Billion Opportunities, calls on the one billion tourists to make their actions count by saving water and energy, using public transport, protecting heritage and more.

China Watch Blog has learnt that one mirror by itself is just a shiny surface. But bring many mirrors together and the result is a multifaceted, seemingly infinite series of reflections that change every time you look.

11 Mirrors, the first member of Design Hotels™ in the Ukraine, is celebrating its grand opening this month. This elegant sanctuary is a reflection of contemporary Kiev: sophisticated and simple, with no need for heavy embellishments.

11 Mirrors

The brainchild of Wladimir Klitschko, 11 Mirrors is the result of his vision of a hotel that would reflect the many different aspects of Kiev as well as his own experience as a world traveler. Anatoliy Kirik and Marina Leo, who are responsible for the architecture and interior design of the hotel, consulted closely with Klitschko while working on 11 Mirrors.

In creating the look and feel of the hotel, their team of Ukrainian and international architects and designers combined global trends with simple, timeless elegance and sophistication.

The narrow 11-story building impresses from the outside with its austere granite façade, combining contemporary design and 19th century architecture. Visitors pass through glass doors to the lobby, where the natural stone walls, reception desk, floor and fireplace complement a stainless steel ceiling designed by Anatoliy Kirik, glass panels and artistic mirrored wall décor by the local Fomichev Brothers.

The 49 luxurious rooms and suites offer peace and privacy, with windows overlooking Kiev’s historical center, intimate lighting, dark wood accents, spacious bathrooms and subtle bursts of color. With spa-inspired bathrooms, specially designed work spaces and fully-stocked bar areas, guests can easily relax and recharge to enjoy the nearby sights and sounds that the city has to offer.

Instead of the heavy imperial embellishments often associated with the Ukraine of the past, contemporary simplicity and elegance prevail throughout the hotel’s interior design. Black and white backgrounds, wide panoramic windows, reflective silver mirrors and playing surfaces and ceramic decorations by majolica artist Taras Tkachenko give the hotel a sense of minimalism, while the amber-colored design bar welcomes guests to the elegant, informal mezzanine restaurant and a fireplace warms cocktail-sipping visitors in the lounge.

Discover the bustling Ukrainian capital – a fairytale city of pear domes and frescoes, a progressive center of science and education, a hub of business and economics and a highly desirable culture and leisure destination. 11 Mirrors is ideally located in the city center, in the very heart of old and dynamic Kiev, just a few meters from the National Opera House. All major historical sites as well as the best cafés, bars, restaurants, shops and art galleries are all within easy walking distance from the hotel.

Rates start at EUR 265.

China Watch Blog brings to you a report from CNN which exposes how the tangled David Petraeus scandal highlights how easily the U.S. government can access citizens’ private e-mails.

CNN said the FBI’s request to access Paula Broadwell’s personal Gmail account was one of 7,969 similar requests Google received from the U.S. government in the first half of 2012, according to Google and news reports. The company said it complied with the requests, either fully or partially, 90% of the time.

According to the latest Google Transparency report, Google fielded 20,938 requests for private account data from governments around the world between January and June of this year. That’s up from 18,257 such requests during the last half of 2011, the company said.

“One trend has become clear: Government surveillance is on the rise,” Dorothy Chou, a Google senior policy analyst, writes in the blog post announcing the latest report — the sixth Google has released in the last three years.

Google stores huge amounts of data and personal information about its users. In addition to the wealth of information in e-mail and Google Drive accounts, the company also has users’ IP addresses, which can be used to determine locations.

Beginning in May of this year, the FBI accessed Gmail accounts used by Broadwell to communicate with Petraeus, the former CIA director, during their affair, according to a report in the Wall Street Journal.

The bi-annual Google Transparency report is Google’s attempt to “shine a light” on how often governments around the world ask to access user data as part of criminal investigations.

The company also publishes data on how often government agencies request that public content be removed from Google services, such as YouTube videos or blog posts on Blogger. The most common reason cited for wanting content taken down is defamation.

U.S. law enforcement agencies seem to be the most curious. The country continues to top the list for the most requests for user data in the world, followed at a distance by India. While Google is admirably proactive about releasing data on government requests, in the majority of cases it does turn over the requested information. The company said it cooperates with U.S. government requests more than any other country.

Outdated laws have created loopholes that allow government and law enforcement agencies to request information and conduct electronic surveillance without warrants. The piece of legislation at the heart of the issue is the Electronic Communications Privacy Act, passed in 1986.

Technology has changed radically in the past 25 years. E-mails, cellphones, location information and data stored on cloud services weren’t considered when the original law was drafted.

Google is an active member of the Digital Due Process Coalition, which has been pushing for reform of the ECPA. The group’s members include Apple, Amazon, the ACLU, Facebook, Google and Twitter along with a slew of other big-name tech companies and civil liberties groups. Other technology companies, including Twitter and LinkedIn, are joining Google and releasing their own transparency reports.

The United States Justice department is against any updates to the law that would require more warrants.

Revising the ECPA wouldn’t prohibit the government and law enforcement agencies from requesting the information, it would just require they go through an approval process to get the warrants. In a bit of circular logic, the Justice Department has argued that the electronic evidence gathered without warrants is necessary to build enough of a case to later get search warrants.