January 9, 2018 / 1:53 PM / 5 months ago

Chinese court jails two for life over $2.4 billion pyramid scheme

SINGAPORE (Reuters) - A Chinese court has sentenced two people to life imprisonment for fraud in a 15.6 billion-yuan (£1.77 billion) pyramid scheme that sucked in more than 200,000 people.

The key figures in the scheme, Huang Dingfang and Cai Keyi, were convicted on Monday at the Hangzhou Intermediate People's Court, according to a statement on the court's website (hangzhou.zjcourt.cn/).

Nineteen others involved were given sentences of up to 12 years, the court in the eastern Chinese city said.

Huang set up Longyan E-commerce Co Ltd in January 2015 and worked with another firm owned by Cai to swindle over 200,000 investors out of more than 15.6 billion yuan, the court said.

They promised annual returns of more than 250 percent to investors who paid in 4,000 yuan each. They then set up a third firm to sell shares, saying it would go public in the United States.

The court said it had ordered the 21 defendants to return over 5.7 billion yuan to more than 170,000 investors. 

China has launched a campaign to stamp out pyramid schemes which typically promise people they can get rich by joining and then recruiting new investors.

Cases investigated by Chinese police in the first nine months of 2017 involved nearly 30 billion yuan, the official Xinhua News Agency said in October.

Reporting by Lee Chyen Yee in Singapore; editing by Andrew Roche

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