China holds fake "terrorist" extortionists

BEIJING (Reuters) - China has detained three men linked to a plot to extort money from a company in Olympic co-host city Qingdao by posing as terrorists and threatening to detonate a bomb, local media reported on Friday.

Last week, a company in Qingdao, which will host Olympic sailing events, received a phone call from a man who claimed to be a member of an "East Turkestan independence group" and threatened a bomb attack, the Beijing News said.

China has blamed separatist groups, who advocate creation of an independent state called East Turkestan in its restive western, largely Muslim, region of Xinjiang, for plotting and carrying out terrorist attacks.

"He demanded (the company) deposit 2.08 million yuan ($302,300) into a bank account he provided," the paper said.

The company alerted police, who detained the men two days later, the paper said.

Investigations found one of the suspects had come up with the idea after gambling away his family's property.

China has warned that terrorism is the biggest threat to the Olympic Games, opening on August 8, and has introduced a flurry of measures in recent months to boost security.

Chinese police officials said in April they had foiled plots by "East Turkestan" separatists to carry out suicide bomb attacks and kidnap athletes to disrupt the Games.

(Reporting by Ian Ransom; Editing by Nick Macfie and Roger Crabb)