Posted on 02/01/2016 8:06:10 AM PST by Citizen Zed
Authorities in China have arrested 21 people on suspicion of defrauding almost one million Chinese investors of 50bn yuan after an online peer-to-peer lender turned out to be a giant Ponzi scheme, state media has alleged.
Police used two mechanical diggers for 20 hours to retrieve 1,200 account books that were buried six feet underground as part of the investigation into one of the biggest financial frauds in the country's history, Xinhua state news agency said.
A total of 21 people were arrested at Ezubao, the company at the centre of the scam, which rose to become China's largest online financing platform in just 18 months.
The firm launched in July 2014 and attracted business by offering investors annual returns of between 9pc and 15pc, far higher than mainstream financial products. One investor was quoted by the state news agency as saying: "If I put 100,000 yuan in to the bank, I only get about 2,000 yuan in interest. But at Ezubao, I was guaranteed interest of 14.6pc, so I will earn about 14,000 yuan."
Others were attracted to the lending platform because it allowed them to withdraw their investments early. Another investor, Mr Zhang, said he was guaranteed his interest - even if the investment company failed, according to state media.
By December 2015, more than 50bn yuan had been invested by 900,000 people, according to Xinhua.
"Ezubao is a complete Ponzi scheme," Zhang Min, the former president of Ezubao's operating company was quoted as saying as he was held in custody. Yong Lei, the company's risk controller, was quoted as saying: "As far as I know, 95pc of the listed projects are fake."
Ezubao had embarked on a massive advertising campaign to raise funds, with many investors falling for the slick adverts screened on state media.
(Excerpt) Read more at telegraph.co.uk ...
“Heads will roll”.
Literally.
Yeah, no joke. They will execute them.
Exactly; these guys are getting the bullet. But not for defrauding the investors. The real crime here was not giving the “right people” a piece of the action.
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