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September 17, 2009

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Woman charged over fake funds ploy

A CHINESE Australian woman has been arrested for allegedly defrauding nine people out of more than 6 million yuan (US$878,616) by luring them to invest in nonexistent overseas funds and shares, city prosecutors said yesterday.

The Shanghai No. 2 Intermediate Prosecutors' Office has charged the suspect, who was identified only by her surname of Li, with fraud.

Li, 46, was born in Shanghai and went to study in Australia in 1990 after graduating from a medical university. She has Australian citizenship.

When she returned to Shanghai and met old friends, she boasted of her successful business involving international financial celebrities.

Her friends asked her to help them with investments.

Li then decided to dupe them into buying bogus funds and stock investment products, prosecutors said.

She registered shell companies in Vanuatu, a tax-free Pacific nation, and touted herself as general manager of the Asia Pacific area for a company called FTC.

She told the victims that the shell companies were highly profitable and persuaded them to buy nonexistent funds and shares in the firms.

The victims were asked to pay A$4,000 (US$3,453) to become members of FTC and then pay US$1,500 to entrust Li to register a company in Vanuatu.

"Li chose her old friends first because she knew they would believe her," said Cao Xiaohang, a prosecutor.

"These friends then introduced more people to Li."

The victims, who invested heavily after the initial fees, heard Li was being prosecuted for operating funds illegally in Australia and contacted Shanghai police in May.

Prosecutors said Li returned to Shanghai to avoid the Australian investigation.


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