A court in Beijing handed down a life sentence for the mastermind behind the $9 billion Ezubao financial Internet scam and sentenced 26 others to jail time.
According to a Reuters news report, the Tuesday (Sept. 12) sentencing brings to a close one of the largest Ponzi schemes to happen in China. As the government steps up against risky and illegal behaviors in the financial sector, it is handing down tough sentences and regulating industries.
Reuters reported that the Beijing First Intermediate People’s Court sentenced Ding Ning – chairman of Anhui Yucheng Holdings Group, which rolled out Ezubao in 2014 – to life in prison. The court also fined him $15.29 million for a bevy of crimes, including engaging in fraud fundraising, illegally possessing a gun and smuggling precious metals. The chairman’s brother, Ding Dian, was also handed a life sentence. Meanwhile, Zhang Min, Yucheng’s president, and 24 others were sentenced for three to 15 years, noted Reuters, citing an article on the Beijing Courts social media account.
In February of 2016, news first broke of the cybercrime charges against Ezubao, which gathered $7.6 billion and impacted more than 900,000 investors who were utilizing its P2P lending platform within the country. The company attracted attention through marketing efforts and the lure of “big returns” – yet, said some executives, as much as 95 percent of projects pushed by the company were, in fact, fake. The promise of returns as great as 14 percent, especially in a slowing economy with low savings rates, brought in multitudes of investors.
In reality, the investments funded the gilded lifestyles of company executives in the Yucheng Group. Among the more eye-popping gifts that changed hands: Chairman Ding Ning provided President Zhang Ming with a $20 million Singapore property, a $1.8 million pink diamond ring and cash bestowments of as much as $83 million.