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December 12, 2009

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Website and fancy offices ... but all a con

EIGHT people have been charged with conning 30 victims into spending more than 7 million yuan (US$1.02 million) on invented overseas financial products, local prosecutors said yesterday.

Ding Zhen and He Min, the ring leaders, didn't buy financial products with the money. They spent it opening branch offices to carry out more swindles, according to the Shanghai No. 2 Intermediate Prosecutors' Office.

In August last year, a local woman surnamed Lu received a call from a man saying he was manager of the Yihui Hong Kong Investment Co. He promoted a Yihui fund that offered dividends four times a year and an annual yield of 20 percent.

Lu deposited 100,000 yuan into an appointed account after signing a contract and later found her purchase record on the company's Website.

"I didn't realize it was a trap at all because the company had a decent office and a formal Website," Lu told prosecutors. But she was just one of 30 victims who "invested" more than 7 million yuan.

By November 2008, the victims realized they weren't receiving the promised dividends and called the police.

Police found Ding and He had registered Yihui in Hong Kong last year. Ding opened a private account in a HSBC Bank in Hong Kong and rented an office in a high-grade office building in the city.

"All that could easily win the trust of the victims," said prosecutor Cao Xiaohang.

The two then recruited agents to make random calls to promote the non-existent overseas fund, said prosecutors.


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