Related News
Court hears taxi Ponzi scheme
By Xu Fang |
January 21, 2009, Wednesday
|
Print Edition
Print Edition
FIVE suspects began trial yesterday in a Shanghai court on charges that they swindled hundreds of people out of hundreds of millions of yuan in a Ponzi scheme linked to nonexistent taxicab investments.
The offer of high returns lured 252 people into investing 850 million yuan (US$124 million) in the scheme overall.
As with any Ponzi scheme, initial investors did earn a profit. But in the end, 165 victims lost a total of 160 million yuan after the fraud was uncovered and the ringleader fled, prosecutors said.
The two-day hearing is being held at Shanghai No. 1 Intermediate People's Court.
The scheme ran from March 1998 to December 2007 and was allegedly created by a woman named Zou Peijie, who is now being sought.
Prosecutors said she lured investors by claiming to be associated with Shanghai Shenjiang Travel Service Co Ltd, a transport company whose business includes taxi operations. Investors were offered a chance to buy a stake in the firm's taxi fleet and earn a monthly return on their capital.
The term of each investment was five years, with the original amount being paid back in two years and hundreds of thousands of yuan in profits promised over the next three.
Zou allegedly showed false Shenjiang receipts and other documents to fool investors
Prosecutors said she recruited Chen Lihan, 68, and his sister-in-law Fu Xiuchun, 56, to find investors. Chen and Fu then talked relatives and friends into investing. Some people even obtained black market loans or sold property to put money into the scheme.
Though no cars were ever purchased, original investors were receiving monthly returns out of the money coming in from new participants. As a result, interest in the scheme snowballed to the point where the capital raised would have been enough to buy nearly 5,000 cars, prosecutors said.
In the end, the scheme collapsed because it could no longer attract enough new investors to keep the existing ones satisfied. Zou disappeared with most of the money in December 2007.
Chen, Fu and three other suspects who had recruited investors surrendered to police. They told the court they did not know they were part of an investment fraud.
The offer of high returns lured 252 people into investing 850 million yuan (US$124 million) in the scheme overall.
As with any Ponzi scheme, initial investors did earn a profit. But in the end, 165 victims lost a total of 160 million yuan after the fraud was uncovered and the ringleader fled, prosecutors said.
The two-day hearing is being held at Shanghai No. 1 Intermediate People's Court.
The scheme ran from March 1998 to December 2007 and was allegedly created by a woman named Zou Peijie, who is now being sought.
Prosecutors said she lured investors by claiming to be associated with Shanghai Shenjiang Travel Service Co Ltd, a transport company whose business includes taxi operations. Investors were offered a chance to buy a stake in the firm's taxi fleet and earn a monthly return on their capital.
The term of each investment was five years, with the original amount being paid back in two years and hundreds of thousands of yuan in profits promised over the next three.
Zou allegedly showed false Shenjiang receipts and other documents to fool investors
Prosecutors said she recruited Chen Lihan, 68, and his sister-in-law Fu Xiuchun, 56, to find investors. Chen and Fu then talked relatives and friends into investing. Some people even obtained black market loans or sold property to put money into the scheme.
Though no cars were ever purchased, original investors were receiving monthly returns out of the money coming in from new participants. As a result, interest in the scheme snowballed to the point where the capital raised would have been enough to buy nearly 5,000 cars, prosecutors said.
In the end, the scheme collapsed because it could no longer attract enough new investors to keep the existing ones satisfied. Zou disappeared with most of the money in December 2007.
Chen, Fu and three other suspects who had recruited investors surrendered to police. They told the court they did not know they were part of an investment fraud.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
