China announces 234 arrests for provincial bank scam

BEIJING (AP) — Authorities in central China on Monday announced the arrest of 234 people involved in a scam aimed at defrauding people of their savings with the false promise of high interest rates on deposits in obscure rural banks.

The scandal drew national attention after investors seeking answers on where their money was going were prevented from reaching Henan’s provincial capital, Zhengzhou, when the health status displayed on their required COVID-19 cellphones …

READ MORE

BEIJING (AP) — Authorities in central China on Monday announced the arrest of 234 people involved in a scam aimed at defrauding people of their savings with the false promise of high interest rates on deposits in obscure rural banks.

The scandal drew national attention after investors seeking answers about where their money was going were unable to reach Henan’s provincial capital, Zhengzhou, when health status displayed on their mandatory COVID cellphone apps. -19 suddenly turned red, preventing them from traveling.

Several bank customers interviewed by the AP said they were interrogated and threatened by police.

Another attempt in July was met by gangs of unidentified men in white shirts who attacked depositors as police stood nearby.

Xuchang city government statement says suspected mastermind Lu Yiwei and his associates took control of four county-level banks and lured investors with promises of interest rates of up to 18% per year. year.

“At present, public security organs have apprehended a large number of suspects, of whom 234 have been arrested,” the statement said.

“Significant progress has been made in recovering stolen property and damage. The investigation and handling of the case is carried out thoroughly in accordance with the law.

The statement said the scheme’s initiators who then “absorbed” the funds had told others about the investments who deposited hundreds of thousands of dollars, giving the scam the appearance of a Ponzi scheme.

No mention was made of any alleged collusion between local authorities, police and the suspects.

The scam unfolded when thousands of customers opened accounts at six banks in Henan and neighboring Anhui province that offered relatively high interest rates. A sharp decline in Chinese economic growth and minimal returns on savings in state banks have prompted many Chinese to invest in unconventional and often risky, even fraudulent, financial vehicles.

Customers of Henan banks later found they could not make withdrawals after reports that the head of the banks’ parent company was wanted for financial crimes. A parent company linked to the banks is under police investigation.

Banking authorities have said they will return some customers’ deposits, but many are still waiting to hear when they will be refunded.

Copyright © 2022 . All rights reserved. This website is not intended for users located in the European Economic Area.

Comments are closed.