Detective hired by GlaxoSmithKline jailed for spying in China

Prison Window

A British private investigator has been sentenced to two and a half years in jail by a Chinese court after becoming embroiled in a sex and whistleblowing scandal at the drug firm GlaxoSmithKline.

Peter Humphrey, 58, was also fined 200,000 yuan (£19,300), and his wife, Yu Yingzeng – a naturalised American citizen – was sentenced to two years and fined 150,000 yuan in the first case of its kind involving foreigners in China.

Humphrey will be deported at the end of his sentence.

GSK was not mentioned during proceedings that shed rare light on the operation of corporate sleuths in the world's second largest economy, but the firm is at the centre of a complex web of allegations.

Humphrey and his wife have been detained since July last year on suspicion of using illegal means to collect data.

GSK had hired them to investigate why the company's then head of China operations, Mark Reilly, had been filmed surreptitiously having sex with his Chinese girlfriend in his guarded luxury home.

"I am very sad about the court's verdict, but I hope the authorities will take into account their poor health conditions," Harvey Humphrey, the couple's 19-year-old son, said in a statement after the court's announcement. Harvey said his father has been suffering from arthritis, compression fractures in his upper spine and a hernia; his mother has a blocked kidney.

The verdicts came as GSK finds itself the target of a separate corruption investigation in China after a whistleblower raised allegations of widespread bribery. Although Chinese authorities have not publicly linked the two cases, Humphrey has blamed GSK for his situation. GSK declined to comment yesterday.

In his closing statement during the day-long trial, Humphrey said he had been fascinated by China since the 1970s and wanted to contribute to Chinese society by fighting corruption.

He said he failed because he misunderstood a change to the country's criminal law on privacy in 2009. "My wife and I still love and respect China passionately," he said. Yu asked for forgiveness.

The case has sent chills through the country's foreign business community. While proceedings at the Shanghai first intermediate people's court on Friday were ostensibly open to the public, authorities allowed only family members and consular officials inside the room. The court broadcast transcripts of the proceedings via its official website feed.

Prosecutors accused Humphrey and Yu of illegally obtaining 256 items of information on Chinese citizens, including IDs, mobile phone numbers and travel records for between 800 and 2,000 yuan (£77-£193) each, the court heard. However, that information was not linked in court to the investigation they carried out on behalf of GSK.

Humphrey accepted the charges but refused to comment on specifics, citing a lack of familiarity with Chinese law. He said his and his wife's Shanghai-based company, ChinaWhys, was chiefly concerned with uncovering instances of fraud.

Humphrey spent hours responding to questions about the company's operations. The firm was registered in Hong Kong and Shanghai, he said. His clients were "large or medium-sized companies" operating in manufacturing and finance, as well as law firms, both foreign and Chinese.

He conducted his investigations via internet searches, interviews and site inspections.

"The majority of our work is done using public information," he said, adding that the firm occasionally contracted third-party companies to track down private information on citizens.

Prosecutors questioned Humphrey over the alleged tailing of a target during a past operation called Operation Blackthorn, in which he investigated the general manager of a Finnish company for fraud. Humphrey said a third-party contractor tailed the target. His lawyer added that tailing a person did not necessarily constitute illegal behaviour.

Humphrey was a Reuters foreign correspondent for nearly two decades and Yu was an accountant. They founded their company in 2003. In her testimony, Wu emphasised that ChinaWhys did not directly buy and sell private information. Instead it used the information to compile reports, which it then sold to clients for between 20,000 and 200,000 yuan. Sometimes, she said, she and Humphrey would assume aliases, posing as business contacts to receive information.

She admitted that she bought private information from three agents: Liu Yu, Cai Zhicheng and a lawyer named Zhou Hongbo. She did not believe that purchasing the information was illegal.

"Do you think it would infringe upon your privacy if your husband's or son's private information was bought and sold?" a prosecutor asked Yu. "I have lived abroad for a very long time," she replied. "My US phone number and address can be found in the yellow pages – in the US, it's very easy to find such information."

The prosecution claimed that before the trial, both Humphrey and Yu testified to police that they knew the company was operating in a legal "grey zone". Prosecutors said the company made about £2m in revenue between 2005 and 2013.

In their closing statement, prosecutors said Humphrey and Yu had "severely" broken the law by systemically violating people's privacy over a period of nine years, bringing them substantial profit. "Let us consider, if our citizens live in fear in such an environment, how can they feel secure, free or have human rights?" they asked.

Harvey originally intended to enrol in university this year to study mechanical engineering. Instead, he has spent most of the past year living in a flat in Surrey, communicating with his parents through consular officials and managing the family assets.

On the day Humphrey and Yu were detained, he was in Hong Kong on a summer internship, he said in an interview before the trial.

Harvey said that he didn't know his parents were detained until a few days later, when consular officials traced them to a detention centre. "I have to say I was relieved. I thought it would be worse – that it was a nasty traffic accident or something," he said. "I didn't know what I was getting into at that point. I thought they would only be away for a month or two."

Powered by Guardian.co.ukThis article was written by Jonathan Kaiman in Shanghai, for The Guardian on Friday 8th August 2014 19.22 Europe/London

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