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February 8, 2012

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Pair charged in alleged 150 million yuan fraud

Two Ponzi scheme suspects, including a Singaporean, accused of swindling nearly 900 victims out of more than 150 million yuan (US$23.78 million) have been indicted for fraud and illegal fund-raising, local prosecutors said yesterday.

The pair, surnamed Ning and Dai, bought the rights to cultivate and exploit forests in Hubei Province in the name of United China Forestry Resources Development Co, Ltd, a Sino-foreign joint venture.

Prosecutors said the suspects claimed their company was listed on the Frankfurt Stock Exchange since 2007 and sold their forest rights to investors through a Shanghai company by promising an annual return of 10 to 13 percent.

Investors could choose to sign an investment contract, maintenance contract or sales contract and each investment cycle was set at five years, it was learned.

Between March 2006 and December 2010, more than 33.4 million yuan was raised through the company, the prosecutors said, and the pair raised another 55.85 million yuan through the Ponzi scheme.

Ning and Dai also claimed their company could help investors sell timber trees and hand them money directly.

From November 2007 to June 2008, the pair persuaded some investors to convert their forest rights, worth 67.97 million yuan, into the shares of a company that they claimed would be listed overseas.


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