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9 arrested in Ponzi con
By Dong Hui |
02:06 UTC+8 May 20, 2009
|
Print Edition
Print Edition
THE Jing'an District Prosecutors' Office has approved the arrests of nine people suspected of swindling 31 local investors out of more than 7.4 million yuan (US$1.1 million) since last May.
The con artists, who pretended to run a funds management company in Hong Kong, fabricated an overseas fund with an annual return of 20 percent in a Ponzi-type scheme - paying off old investors with new investors' money.
Police were tipped off last August by a local woman who had invested 100,000 yuan in the Yihui Hong Kong Investment Co.
The China Securities Regulatory Commission's Shanghai bureau said the company had never been approved for trading securities on Chinese mainland, so police began to investigate.
After they found no staff in one of the company's Shanghai offices on Beijing Road W., police suspected it was a scam.
They later discovered a large amount of money had been transferred from the company's bank account to a private account, while the company's server was found in Jiangxi Province instead of Hong Kong. The highly profitable fund product never existed, police said.
Two main suspects, surnamed Ding and He, randomly called local residents to sell their scam.
They returned about 397,000 yuan to victims in the first several months to attract further investment. A fake company Website was even set up to let victims check their investment and profit records, police said.
The China Securities Regulatory Commission does not approve any overseas businesses to sell investment funds on Chinese mainland.
The con artists, who pretended to run a funds management company in Hong Kong, fabricated an overseas fund with an annual return of 20 percent in a Ponzi-type scheme - paying off old investors with new investors' money.
Police were tipped off last August by a local woman who had invested 100,000 yuan in the Yihui Hong Kong Investment Co.
The China Securities Regulatory Commission's Shanghai bureau said the company had never been approved for trading securities on Chinese mainland, so police began to investigate.
After they found no staff in one of the company's Shanghai offices on Beijing Road W., police suspected it was a scam.
They later discovered a large amount of money had been transferred from the company's bank account to a private account, while the company's server was found in Jiangxi Province instead of Hong Kong. The highly profitable fund product never existed, police said.
Two main suspects, surnamed Ding and He, randomly called local residents to sell their scam.
They returned about 397,000 yuan to victims in the first several months to attract further investment. A fake company Website was even set up to let victims check their investment and profit records, police said.
The China Securities Regulatory Commission does not approve any overseas businesses to sell investment funds on Chinese mainland.
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