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Phoenix666 [soylentnews.org] writes:

Chinese authorities have busted a Ponzi scheme [scmp.com] involving over 50 billion yuan (HK$59 billion) and more than 900,000 investors across the country, state-run Xinhua reported late Sunday night.

The case surrounding Ezubao, China’s largest online peer-to-peer (P2P) lender, is set to become the country’s biggest illegal fund-raising case in terms of money and the number of investors.

At least 21 suspects, including the scheme’s alleged high-flying mastermind, Ding Ning, were under arrest, Xinhua reported. The suspects are accused of luring in investors with false offers of double-digit annual returns.

Ding, 34, financed his lavish lifestyle with money fleeced from investors, according to previous reports by Caixin.

Ezubao was launched in July 2014 and embarked on a massive advertising campaign to raise funds.

On the surface, it was a P2P website with various projects, offering investors annual returns ranging between 9 per cent and 14.6 per cent.

In reality, the website’s operators made up most of the projects listed on its website and used funds from new investors to pay old debts, Xinhua reported.

The term for such schemes in the West is, "hedge fund."

Original Submission