China’s mega-fund-raising fraud case was pronounced in Guangzhou, involving nearly 10 billion yuan.
Xinhua News Agency, Guangzhou, February 29 th: China’s mega-fund-raising fraud case was pronounced in Guangzhou, involving nearly 10 billion yuan.
Xinhua News Agency reporter Mao Yizhu Zhan Yijia
On the morning of February 29th, the Guangzhou Intermediate People’s Court issued a first-instance verdict on 24 defendants in the fund-raising fraud case of "Bangjia" in Guangdong, among whom Jiang Hongwei was found as the principal offender and sentenced to life imprisonment for the crime of fund-raising fraud. In addition, the illegal income and property should be returned to the victim in proportion.
According to the information of the procuratorate, the "Bangjia" case is by far the largest financial crime case in China, with the highest amount involved and the largest number of victims.
Guangzhou Intermediate People’s Court found through trial that from December 2002 to August 2010, Jiang Hongwei registered and established four companies in Guangzhou, including Guangdong Bangjia Company, and successively established 64 branches and 24 subsidiaries in 16 provinces and municipalities directly under the central government. On the surface, these companies are engaged in physical leasing of automobiles, sales of health care products and organic food, but in fact they have not obtained the administrative license of financing from government departments at all.
The reporter found that there are three ways for Jiang Hongwei and others to raise funds for fraud: one is to sell the company membership card, claiming that they can get a fixed return of 16% to 30% per quarter, and the principal can be recovered when the contract expires; The second is to lie about regional cooperation, operate a "Bangjia Leasing Experience Store", or rent a car purchased on behalf of the victim, flaunting that it can get a return on investment equivalent to 25% to 47.5% of the principal, and also guarantee to return the principal within a certain period of time; The third is to sign a "RMB loan contract" with the victim at an annual interest rate of 30% to attract the victim’s investment.
According to forensic accounting, during the period from December 2002 to May 2012, the amount of illegal fund-raising of four companies involved was as high as 9.95 billion yuan, and the number of victims reached more than 230,000.
Most of these victims are middle-aged and elderly people. At the sentencing scene on the 29th, many people were very excited at the thought that their hard-earned money might be lost, and some people burst into tears on the spot.
Tens of thousands of victims have been "pitted" and lost their blood, but fraudsters have squandered their hard-earned money. Guangzhou Intermediate People’s Court found out that Jiang Hongwei bought luxury goods such as designer clothes and watches by swiping his credit card, and squandered fund-raising of RMB 22,881,775.12, USD 236,008.32 and EUR 29,828.74.
In the first instance, Guangzhou Intermediate People’s Court sentenced Jiang Hongwei to life imprisonment and confiscated all his personal property. The remaining 23 people were sentenced to three years’ probation and four years to 14 years’ imprisonment for the crime of illegally absorbing public deposits or fund-raising fraud, and were also fined accordingly.
However, due to Jiang Hongwei’s inability to account for the whereabouts of some of the funds raised, the account books of the company involved are unclear and the whereabouts are unknown, so it is difficult for many victims to get back all or part of their defrauded funds at present.
"This is not an isolated case." A case handler of the Guangzhou Municipal People’s Procuratorate told the reporter that most of the illegal fund-raising crimes were often squandered or unaccounted for before they were cracked, or shrunk in the market and used for investment and lending. After the incident, most of the funds could not be recovered, causing serious economic losses to the victims.