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Ponzi scheme rips investors off 2.4b yuan
By Li Qian |
October 26, 2012, Friday
|
Online Edition
Online Edition
A US-based Ponzi scheme website, Hootoot660, has been destroyed after it reportedly swindled more than 200,000 Chinese out of 2.4 billion yuan (US$384 million), police said.
The website targeted people who want quick profits, promising them higher returns and charging them 660 yuan to 12,540 yuan for membership. It asked them to buy Guquan, an online stock that "would never fall," and find new investors in order to earn high commissions.
To win others' trust, the website paid returns to early investors with money defrauded from new members, Yangtze Evening News reported today.
A Chinese businessman surnamed Yun set up the Hootoot Trading Company in Texas in 2010 and opened the website a year later. But he failed to make money until he hit the idea of selling virtual stocks this January and raked in hundreds of millions of yuan in just three months.
His co-founder, a Chinese surnamed Pang, was arrested in Henan Province on May 3. Their website engineer, surnamed Xie, was caught in Guangdong Province on May 10. Other members of the fraud ring were also seized. Only Yun is still on the run.
Police have issued three arrest warrants online, the newspaper said.
The website targeted people who want quick profits, promising them higher returns and charging them 660 yuan to 12,540 yuan for membership. It asked them to buy Guquan, an online stock that "would never fall," and find new investors in order to earn high commissions.
To win others' trust, the website paid returns to early investors with money defrauded from new members, Yangtze Evening News reported today.
A Chinese businessman surnamed Yun set up the Hootoot Trading Company in Texas in 2010 and opened the website a year later. But he failed to make money until he hit the idea of selling virtual stocks this January and raked in hundreds of millions of yuan in just three months.
His co-founder, a Chinese surnamed Pang, was arrested in Henan Province on May 3. Their website engineer, surnamed Xie, was caught in Guangdong Province on May 10. Other members of the fraud ring were also seized. Only Yun is still on the run.
Police have issued three arrest warrants online, the newspaper said.
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