On a muggy evening in July 2004, on a concrete lane reeking of raw sewage and chemicals from surrounding factories, a stranger sprang out of a white van. He yanked 16-month-old Fei Mei from the arms of her eight-year-old cousin and sped away.

All night, her parents searched this industrial city, Dongguan, for their round-faced baby girl.

"We looked everywhere, on every street corner," said her father, Xu Mohu. "We thought maybe the guy wouldn't like a girl and he would abandon her."

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That was once a reasonable assumption. For generations, girls in rural China have been left to die in the cold or abandoned on doorsteps while families devote their scant resources to nourishing boys. But over the past decade, a wave of foreigners, mostly Americans, has poured into China with US dollars in hand to adopt mainland babies, 95 percent of them girls.

Last year, the United States issued nearly 8,000 visas to Chinese-born children adopted by American parents. More than 50,000 children have left China for the US since 1992. And more than 10,000 children have landed in other countries, according to Chinese reports.

The foreign adoption program has matched castoff Chinese babies with foreign families eager for them, while delivering crucial funding to orphanages in the mainland. But it has also spawned a tragic irony, transforming once-unwanted Chinese girls into valuable commodities worth stealing.

The morning after Fei Mei was taken, her parents made a report at the local police station, where they learned that on the same night, another baby girl had been taken in Dongguan.

The prevalence of the problem has become clearer in recent weeks with the prosecution of a child-trafficking ring in neighboring Hunan province.

Last November, police arrested 27 members of a ring that since 2002 had abducted or purchased as many as 1,000 children in Guangdong and sold them to orphanages in Hunan for US$400 (HK$3,120) to US$538, according to reports in Chinese state media and sources familiar with the case.

The orphanages placed most of those children in homes with unwitting foreign families, many of them Americans, in exchange for mandatory contributions of US$3,000 per baby - a sum nearly twice the average annual Chinese income - according to sources familiar with the prosecution.

Last month, a court in Hunan sentenced three of those baby traffickers to 15 years in prison and imposed terms of three to 13 years on six others, the official Xinhua News Agency reported.

Twenty-three local government officials in Hengyang, the city at the center of the case, have been fired. Attorneys for those sentenced said the babies involved were abandoned and then sold to orphanages, but not abducted. They plan appeals.

On the lane where Fei Mei vanished, her parents still wonder what happened to their daughter. "We think of her all the time," Xu said. "But chances are, we'll never see her again."

On the other side of the world, in Jenison, Michigan, Susan and Gordon Toering tuck their daughter in to bed and wonder where she really came from. They adopted Stacie in August 2005 from an orphanage in Hengyang.

The paperwork from the adoption agency said she had been found abandoned. But sources familiar with the prosecution and two defense attorneys said orphanage directors faked reports to make it seem the babies they bought had been abandoned, allowing them to gain government clearance for foreign adoptions.

The Toerings already had three older children. Evangelical Christians, they adopted in China out of a sense that they were doing something generous for a child in need.

"If there's some mother out there grieving because her baby just was taken from her, that's just so bad," Susan Toering said. "Am I feeding into this? Am I causing others to say, `There's a market for babies?"'

Those who have studied the foreign adoption program in China say its exploitation by traffickers is not a surprising outcome in this country still moving from communism to capitalism, where anything profitable is quickly commercialized.

"It's a corrupt system," said Brian Stuy, a Salt Lake City resident who has adopted three Chinese girls and operates Research-China.org, which traces the origins of such children. "It's just so driven by money, and there's no check and balance to the greed."

A state agency in Beijing, the China Center of Adoption Affairs, pairs prospective adoptive families with available Chinese children. Foreigners who want to adopt must work through a foreign agency certified by the CCAA. The process entails many fees, the largest paid as parents depart the province in which they adopt: They surrender US$3,000 in cash, typically in US$100 bills, and usually into the hands of the orphanage director.

According to CCAA guidelines, the money is given to orphanages as reimbursement for the care of adopted children. But like many government-run services in China, orphanages are prone to financial abuse. "Perhaps 5 to 10 percent of what's given by central, provincial and local governments actually benefits the kids," said a Western aid worker who has worked in Chinese orphanages for a decade.

A former worker at an orphanage in central China said she routinely witnessed local staff members carting off goods donated by aid groups - medical equipment, blankets, formula. "The adults basically steal out of the mouths of the babies," she said.

Such is the system absorbing the proceeds from foreign adoptions. Whole industries have sprouted to service the people involved. Travel agencies ferry foreign families to sightseeing spots in Beijing, then on to the provinces handling the adoptions.

Playrooms occupy space at five-star hotels in cities that have become hubs for adoptions, their lobbies often packed with foreigners carrying Chinese babies. Around the White Swan Hotel in Guangzhou, the city through which every family must pass to receive a US visa for a child, streets are thick with stroller-rental shops and silk baby outfits embossed with traditional logos. The hotel gives each adopting family a special doll manufactured by Mattel - "Going Home Barbie," the iconic plastic figure carrying a Chinese baby.

Assuming that each family that has adopted a Chinese baby has handed over at least US$3,000, Americans last year injected about US$24 million into Chinese orphanages. In many instances, the money appears to be put to good use.

"In the past, the living standards were very low," said Marcia Ma, a coordinator for Project Hope, which provides medical help to orphanages throughout China. "You would go to orphanages and there was a bad smell; the children were not clean. But now there is newer equipment for medical treatment and better hygiene."

But some orphanage directors have used proceeds from foreign adoptions to build profit-making homes for senior citizens, according to aid workers and orphanage officials. And a director for an orphanage in central China used foreign contributions to send her daughter to college in Switzerland, according to a former colleague.

Little of that is evident to foreigners, who are allowed to visit only the better orphanages. When the Toerings went to Hunan to pick up Stacie last August, they wanted to visit the Hengyang City orphanage but were denied permission.

"As a mother, I needed to see where she had been for 10 months," Toering said. "The guide said it wasn't up to the standard and we weren't allowed to go."

Many families adopting in China cite a record of transparent dealings with the CCAA and the ready availability of healthy infants.

"Many come from rural areas where birth mothers don't have money to buy cigarettes and alcohol," said Lindsay Yeakley, public affairs director at Great Wall China Adoption in Austin, a nonprofit organization that has placed about 5,000 Chinese children in American homes over the past decade.

Adopting families take pride in providing needed homes. But the growth of the foreign adoption program has prevented some orphans from finding homes in China. With each healthy infant now potentially worth US$3,000 to an orphanage director through a foreign adoption, many institutions have put up barriers to domestic adoptions, according to sources.

Last year in the city of Kunming, He Fen and her husband decided to adopt a baby girl. But when they approached the director of a local orphanage, he told them they would need an endorsement from a major state-owned company or government institution, she said, making her husband - a private merchant - ineligible. They would have to pay about US$750.

"Foreigners from the US and Europe adopt so many babies from China, and all they have to do is pay some money," she said. "Why has it become so difficult for Chinese people?"

Long before the advent of foreign adoption, baby trafficking was a problem in China. Some children are sold into prostitution. Others - mostly boys - have been purchased or abducted, then sold to childless couples. But the recent revelations of trafficking in Guangdong and Hunan show how an underground industry has tapped into the most lucrative pipeline, connecting traffickers with families overseas.

Located in central Hunan, the birthplace of Mao Zedong, Hengyang is a desolate city. Abandoned factories sit lifeless. Soot stains the walls of decrepit housing.

Local officials declined requests for interviews. But sources familiar with the prosecution confirmed accounts in the state press that the center of trafficking was the Hengyang County orphanage, a white-tiled, three-story building set behind a brick wall.

The first sign that something was amiss was the wealth that began to emerge, according to a lawyer involved in the prosecution and people living near the orphanage.

Staffers began erecting new houses. The director navigated the area's muddy roads in a chauffeured sedan. They were purchasing infants from traffickers, then selling them to other orphanages for foreign adoption, according to the prosecution source.

Traffickers based in Guangdong were abducting and buying infants, then carrying them to Hengyang by bus and train, the lawyer said. They were targeting the children of migrant workers, figuring that such families were less likely to be taken seriously by the police.

Last November, a stranger carried off Li Meilan's seven-month-old daughter as she played in a garden in Dongguan. Li came from a village in Jiangxi province, one of the poorest. The police treated her with disdain, she said. "They acted as if I had lost a dog."

Yuan Baishun, a lawyer for one of those sentenced in the case - Chen Ming, director of the Hengdong County orphanage in Hengyang - said none of the 70-plus baby girls whose cases were presented by prosecutors was abducted. Rather, Yuan said, they were abandoned and then sold in transactions brokered by a woman named Liang Guihong, who lived in Guangdong.

"Old Lady Liang was quite well known locally for being warm-hearted and taking care of abandoned babies," Yuan said.

According to Yuan, in 2001, another of those sentenced, Duan Meilin, brought some of the babies to the Changning County Social Welfare Institute, an orphanage in Hengyang eligible to conduct foreign adoptions.

Over subsequent years, Liang and Duan together transferred as many as 1,000 babies to orphanages in Hengyang, Yuan said.

Duan's attorney, Zhu Xiaoyun, confirmed that his client participated in the sales but said none of the children had been abducted. Duan's mother, Chen Zhiding, said her son received about US$36 for each baby. An attorney for Liang - who was also sentenced - declined to comment.

But sources familiar with the investigation said many children were abducted. The court ruled that the director of the Hengdong County orphanage "was cognizant of the fact that he had purchased babies that had been abducted," according to the verdict.

The directors of the six Hengyang county orphanages conspired with local Civil Affairs bureaus to concoct police reports asserting that the babies had been abandoned, according to the prosecution source and defense attorneys.

Before 2004, the Hengyang County orphanage was not eligible for the foreign adoption program, so it sold as many as 30 healthy babies a month to participating local orphanages for about US$1,000 each, according to a prosecution source and defense attorneys.

Neighbors said they were awakened at night by the sounds of crying babies, as groups of six to 12 were loaded into a van and taken away.

The Hengdong County orphanage put 288 babies up for foreign adoption from October 2002 to November 2005, according to a log book described by defense attorneys. The Changning County orphanage put 250 babies up for foreign adoption over the same period, the sources said.

In the fall of 2004, the Hengyang County orphanage gained the right to participate in foreign adoptions. US officials refused to disclose the number of visas issued to children adopted through that institution.

According to Stuy, the researcher, listings of abandoned children in the provincial newspaper suggest foreign adoptions from that orphanage ranged between zero and 10 a month for most of 2005, then spiked to 29 in October.

Under whose roofs those children now sleep remains a mystery.

In a written statement, officials at the US Embassy said they immediately sought a report from the CCAA in November, after the arrests. The CCAA assured them that "the matter was being properly handled," but rebuffed requests for details while the case was being prosecuted. US officials said they would seek further meetings.

Great Wall, the Texas-based adoption agency, has placed many children from Hengyang orphanages in American homes. It declined to say whether it has found evidence of trafficker involvement in any of its adoptions.

As Stacie Toering grows up in Michigan, she and her parents may never know whether she was really abandoned on Fengao Street in Hengyang County on an October morning when she was two months old, as the police report states, or whether she was sold or pried from the arms of her mother.

"This is just a horrible thing, just sickening," Gordon Toering said. "If we can't bring closure to it, we're just going to have to live with it." THE WASHINGTON POST