China’s law has never been merciful either to corrupt officials or any offender involved in fraud. People accused in China cannot rely on being under house arrest that is common practice for high-ranking officials in Russia.
The recent ruling of a Beijing court is a showcase of the government’s tough stance on illegal financial business in the country. The Beijing First Intermediate People’s Court sentenced two men who ran a Ponzi scheme to lifetime imprisonment. Ezubao has been the biggest online lending fraud in China’s history. The chairman based his business on a simple principle. He attracted money from investors by offering high interest rates. He defrauded 900,000 people out of more than 50 billion Chinese yuan ($7.6 billion). Authorities spotted a suspicious Internet firm which was managed by two entrepreneurs. The investigation was launched in December 2015. Eventually, in 2016 the online project was terminated. The two adventurous partners ran a Ponzi scheme to pay off some investors. Nevertheless, according to police estimates, Ezubao failed to repay 38 billion yuan ($5.8 billion).
Interestingly, the large-scale fundraising scheme was established by two brothers: Ding Ning, the chairman and founder, and Ding Dian, his right-hand man. They have to pay a fine of 100 million yuan ($15.3 million) and 70 million yuan ($10.7 million) respectively. Besides, 24 people involved have been found guilty of the scam and sentenced to 3-15 years in prison.
