The scheme,which went on for at least three years,was masterminded by Wang Gang,the executive mana-ger of a local travel agency,according to police spokeswoman Fang Ding-hua,who did not identify the agency.

Fang alleges that Wang used his position to fabricate lists of local residents travelling abroad as part of a package tour.Under Chinese monetary laws,people travelling overseas each can exchange up to US$4,000 worth of renminbi into foreign currency.Until July this year,travelers could only exchange their currency through travel agents.

Wang abused the regulations,police said,by exchanging currency for his fictitious passengers.

"Then,all the money was converted back on the black market where the exchange rate is higher than the official rate,"said Fang.

While the black market rate is only slightly above the official rate on small transactions,the huge size of Wang's dealings allowed him to get preferential rates,making the gambit highly profitable.

Fearing that the massive amount of money he was exchanging would raise a few eyebrows,Wang began offering bribes to several employees of the Bank of China to ignore his suspicious behavior,police allege.

A number of bank employees are currently under investigation.

Police are also investigating Wang and his associated for fabricating quota reports on how many tourists his agency arranged overseas tours for.The company is only allowed to set up tours for 500passengers a year,however,police say it was booking overseas trips for more than 10,000. This massive business expansion was aimed at helping his exchange scheme,police say.

Police say Wang has been at it since 1999when he joined his curr-ent post after being fired by Huating Overseas Tour Agency in June 1998.

After joining the new agency,Wang subcontracted its overseas package-tour department for an annual licensing fee of 300,000yuan.The deal allowed him to use the agency to attract travelers,while giv-ing him a shiled to hide his crimes.

The hustle began to fall apart late last year when an anonymous whistle blower sent a letter to the cops outlining Wang's illegal dealings.While police don't know who sent the letter,Wang's massive spending sprees may have raised suspicion among friends and co-workers.Police say at the height of his scheme,Wang was buying a new villa every week and once bought eight new cars on one occasion.

( eastday.com September 17, 2002)