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July 12, 2010

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2 sent to prison for insurance scheme

TWO former insurance agents have been sentenced to 11 and 14 years in prison for swindling 15.17 million yuan (US$2.24 million) from 14 people by using falsified insurance financing products, an appeal court said over the weekend.

Ge Changliang, a former employee of an insurance company that was not identified, was jailed for 14 years and his colleague Zheng Min was sentenced to 11 years for fraud.

They had promised victims an annual return of 10 percent from 2004 to 2009 and caused them combined losses of 11 million yuan, the Shanghai No. 2 Intermediate People's Court ruled.

Most of the swindled money was used for stock investments, gambling and daily expenses, the court said.

Ge told the court that he thought of using fake insurance policies to cheat clients so he could invest in the stock market in 2004, when Chinese markets were booming.

He asked others to make a phony insurance policy for him and got it covered by taking advantage of his position.

He and Zheng then began to promote a so-called financing product, promising a yearly return of 10 percent.

The first victim was Zheng's old client surnamed Wang. He invested 2.95 million yuan in the non-existent product from late 2004 to 2009.

Wang received 650,000 yuan in returns but failed to get back his original investment.

The duo's biggest victim, surnamed Li, was introduced to them by Wang.

Li was attracted to the seemingly stable profits and invested nearly 7 million yuan in the phony product. He received only 1.3 million in returns.

When more victims realized they had been cheated, the two were soon caught by police officers.


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