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Seven jailed over 470m yuan fraud

SEVEN businessmen have been jailed for running an illegal investment firm that cheated 470 million yuan (US$68.85 million) from more than 3,300 victims, mostly senior residents in south China's Guangdong Province.

Zhang Junchuan, the group leader, was imprisoned for 15 years yesterday by Guangzhou People's Intermediate Court, today's Nanfang Daily reported.

Another six members were sentenced to between three and nine years with fines ranging from 50,000 yuan to 400,000 yuan. Their Junlian company was fined 10 million yuan, the newspaper said.

The court said Zhang launched the Junlian firm in 2003 to trade electronic security products.

Finding this unprofitable, Zhang developed a scheme to absorb money from the public to invest in the Shanxi Coal Trade Center and other property projects.

Promising a yearly interest rate of 25 percent, the company borrowed 476.31 million yuan from 3,350 victims from February 2003 to April 2008.

But the company, using 25 percent of the income to pay the interest and another 25 percent to pay its sales staff, only spent 15 percent, or 70 million yuan, in real estate investment, the court said.

It resulted in a loss of 320 million yuan for the investors.

Nearly 300 victims heard yesterday's verdict at the courtroom, 80 percent of whom are seniors, the Nanfang Daily report said.


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