Most of the "shady" business practices are from counterfeit sales. PayPal used to do business with Alibaba. In fact, most of my fraud claims were Alibaba purchases because they were selling knock-offs (and still do). Unfortunately, counterfeit sales makes up a large portion of China's GDP so they sort of turn a blind eye to it (at least in my experience). Alibaba would never dispute a claim filed against them, a refund would always be issued immediately. Hell, their account was managed by a senior account manager and no one that wasn't him/her or an executive could touch it (it had so much data, it almost wouldn't load for me). I'm not sure what exactly led to PayPal "parting ways" but it had a lot to do with their business model. As far as people going to jail... I never heard of that happening. I would like to think that some of my Compliance work led to some cases being filed or arrests being made. I investigated and filed reports for everything from simple Chinese counterfeit to major child pornography rings.