Police have cracked the city's biggest counterfeit money case, Shanghai Municipal Public Security Bureau told the media yesterday.

The case involved eight suspects and 4 million yuan (US$500,000) in counterfeit notes.

The head of the ring Li Haiming, from Henan Province, allegedly purchased counterfeit money from Shanwei, Guangdong Province, at a very low price, and then transported it to Shanghai and sold it on.

His activities were said to have increased after police cracked another major counterfeiting ring this January. Police seized more than 3 million yuan (US$370,000) in fake notes from the ring, which was headed by a man called Zhang Jiguo.

Police first came across Li Haiming in early May when they were investigating a small counterfeit transaction.

They established that a person using the name "Haiming" had likely filled the market left by Zhang, and set up a special squad to investigate.

A month later the squad found out the name of the ringleader and his address.

"Li Haiming is very cunning and prudent," said Xie Lu, the deputy director of the squad.

"He never allowed his distributors to see his face."

On July 2, the squad received a tip that Li Haiming was heading towards Guangdong Province to collect more counterfeit notes with a man called "Anning," and was planning to return to Shanghai on July 5.

The special squad prepared to arrest him on his return, but to their surprise he came back empty-handed.

They tracked down the counterfeit notes on the morning of July 7, when "Anning" entered Shanghai on a coach from Shenzhen. He was arrested as he hailed a taxi, and police found more than 4 million yuan in his bags, as well as US$2,00.

Li Haiming and six other suspects were caught later that day.

"Counterfeit money trading has increased by 20 per cent since last year in Shanghai, and we have seized seven times as many notes," said Ni Ruiping, an officer with the bureau.

(Shanghai Daily July 21, 2006)