The latest diplomatic spat started with a top-level request from the Ministry of Public Security in Beijing to help dismantle a criminal gang that had reportedly swindled up to 140 million yuan (HK$165.8 million) from mainland victims in just six months of operation last year.

The request was sent through the Chinese embassy to Magtanggol Gatdula, director of the National Bureau of Investigation under the Department of Justice, who briefed Cesar Bacani, chief of the bureau's Anti-Fraud and Action Division. 'We were given the names, addresses and information to be validated,' Bacani said. Bacani formed a team to conduct surveillance on eight locations, all in upmarket neighbourhoods.

Investigators from Beijing also arrived to brief Bacani and his men, informing them that the suspects were part of a large ring that was targeting mainland Chinese.

'They would call and introduce themselves as a judge, prosecutor or police officer and tell the (potential) victim they had a pending charge or had committed a crime but could settle this by paying an amount,' Bacani said.

The victim would then be told to open a mainland bank account and deposit all their savings in that account. They were then told to provide their ATM card numbers and passwords, which the suspects said would be placed at the 'court' for evidence and protection.

Using that information, the conmen then transferred money from those accounts to banks in Taiwan and the mainland, the Philippines and Thailand.

'Some of their victims were relatives of Chinese government officials and most of them were also Chinese retirees,' Bacani said.

At one of the locations under surveillance, the bureau's team noted a silver Ford Expedition. 'It was found to be registered under the name of Wei Hau Lo whom the Chinese police said was the ring leader,' Bacani said. He declined to go into the details of how they verified that the persons they were monitoring were engaged in illegal activities.

On December 22, they obtained a warrant to arrest Wei Hau Lo and his associates and five days later up to 50 agents raided the eight residences. Two were near the upmarket neighbourhood of The Fort, two in the gated village of Ayala, Alabang, one in another gated community of Bel Air, Makati, two others in Muntinlupa and one in Paranaque.

All the suspects, except one, gave themselves up without a fight. The suspect in Bel Air identified as Lin To tried to attack officers with a knife and an agent shot him in the stomach. Lin To was rushed to the hospital and treated, Bacani said.

However, they found no trace of the alleged ringleader, Wei.

The NBI was later told that simultaneous raids were conducted on the mainland and up to 100 were arrested.

Bacani said they seized laptops, phones, ATM cards and bank documents. They also found a long list of potential victims.

Bacani said that during the raid it was difficult to ascertain where the suspects, who spoke no English, came from since they had no travel documents. He said some members of the raiding team spoke enough Chinese to converse with them.

The Taipei Economic and Cultural Office (TECO), which represents Taiwanese interests in the Philippines, gave a different account of the arrests.

TECO head Donald Lee said: 'Unfortunately, when the 14 Taiwanese nationals were arrested on December 27, most of their passports were taken away by the law enforcement officers.'

Bacani denied this charge. He confirmed a delegation from TECO came to his office on December 28, requesting the 14 suspects be released into their custody. The request was denied pending verification of their residency, Bacani said. The next day, the NBI turned all the suspects over to the Bureau of Immigration and Deportation 'because we could not produce any travel papers for them'. The Philippine government regards them as 'undocumented aliens'.

But TECO insisted they were not in the country illegally and produced the visas that were issued to the suspects by the Manila Economic and Cultural Office in Taipei that had allowed the Taiwanese to enter the country legally.

Justice Secretary Leila de Lima broke her silence on the issue for the first time on Friday, saying those documents were not valid because they were just photocopies for applications for passport and photocopies of alleged passports.

Defending the deportations, she stressed that the valid documents were never produced when they were arrested.

'When they were raided, the suspects were frisked and asked to produce identification cards and travel documents like passports,' she said. 'They had none to show. When they were unable to produce anything, especially passports, they were turned over to the Bureau of Immigration. Because of that, they were treated as undocumented aliens.'

For the whole of last month there was a tug of war between Philippine and Taiwanese authorities, with TECO obtaining a habeas corpus order from the Court of Appeals on January 31. The order would have required the authorities to present the Taiwanese in court. They were scheduled to appear in court in the afternoon of February 2. On the morning of February 2, Lee rushed to the airport to try to stop the 14 Taiwanese from boarding a chartered Air China flight to Beijing. But he said that he and the suspects' lawyers were unable to get past airport police to serve the writ to the immigration officers.

Bacani said he only learned they had all been deported to the mainland was when the Taiwanese failed to appear that afternoon.

Lee said the Philippines owed the Taiwanese government an apology for the deportation, claiming they succumbed to pressure from Beijing when they should have sent the deportees to Taiwan.

He said Manila's action greatly impaired relations with Taipei, and warned Taiwanese authorities could retaliate against the tens of thousands of Filipino workers in the island. 'How can the Philippine government expect Taiwan to provide the deserved legal rights and protection to the 80,000 OFWs (Filipino workers) in Taiwan?' Lee said.

Taiwan has increased the screening period for Filipinos trying to enter the island to work, and threatened to bar them from entering completely. As part of the island's protest, Lee temporarily returned to Taipei on Friday.

Accusations of caving in to Beijing pressure were also levelled at President Benigno Aquino's government's in December when it did not attend the Nobel Peace Prize ceremony.

Aquino said at the time the move was meant to encourage China to spare five Filipinos on death row there for drug trafficking.

Presidential spokesman Edwin Lacierda said: 'These Taiwanese nationals are part of an international crime ring ... we did what was proper. The evidence is in China, the crime was committed in China, so it was in our best national interest to deport them to China.'

The Chinese embassy was unavailable for comment.