Chinese businesswoman sentenced to death for Ponzi scheme

May 17, 2013
May 17, 2013

A court in China’s Zhejiang province has sentenced a businesswoman to death for fraud and “illegal fund-raising,” after she racked up 428 million yuan ($69.7 million) in trading losses. Lin Haiyan raised 640 million yuan, mostly from friends and former coworkers, to invest in securities and future contracts. But when her trades went wrong she lied about her returns and used funds from new investors to repay existing ones.

China has convicted 4,170 people on charges of “illegal fund-raising” since 2011, handing out 1,449 sentences ranging from five years in prison to death. But critics are doubtful that the biggest financial villains are being punished. “The proportion of corrupt officials and state-owned enterprise executives who get the death penalty is extremely low, while the rate among private entrepreneurs is extremely high,” Shanghai-based lawyer Li Honghua told Radio Free Asia.

While individuals like Lin have landed in jail or worse, there are persistent reports of dodgy dealings at China’s government-controlled financial institutions, where often-dubious corporate and municipal loans are repackaged into “wealth management products” and sold to retail customers as high-yielding investments. The face value of China’s wealth management is at least 7.1 trillion yuan ($1.1 trillion).

Lin’s death penalty is subject to appeal. Last year the death sentence against Wu Ying, another businesswoman convicted of investment fraud, was lowered to a likely life sentence.

Top News

Powered by WordPress.com VIP
Follow

Get every new post delivered to your Inbox.

Join 24,419 other followers