Monday, May 20, 2013

China hands out Death Sentence to Ponzi Schemer (not the first time)

Wenzhou in China
Wenzhou in China (Photo credit: Wikipedia)
As reported by court website in Wenzhou, China through Nasdaq news website, Haiyan Lin, 39, has been sentenced to death for her role in leading a $428 RMB ($70 million USD) Ponzi scheme since 2007. The scheme came apart in October 2011 and she was arrested.

A different woman in the same region, Ying Wu, had her death sentence commuted to life without parole recently when an outcry over equivocal evidence presented at the trial. She was accused of running a $60 million USD Ponzi when her attempt to expand her nail salon franchise tanked.

China regards economic crimes as tantamount to treason, due to a very centralized economy. However, this also means banks are not well-regarded and much of the money being lent was from private hands, without regulation and sometimes, the ventures do fail, and some of those failed businesses were charged as Ponzi schemes by overeager officials wanting to look "tough on crime". It is very difficult to determine what is normal business failure and what is Ponzi scheme fraud, outside experts pointed out.

However, in this case, Ms. Lin apparently did present herself as an investment company and issued fake statements of earnings and such while the company actually lost money, making her a mini-Madoff of China.
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