200 suspects detained in raids on illegal fundraisers

200 suspects detained in raids on illegal fundraisers
PHOTO: The Straits Times

CHINA - Guangdong police have detained 210 suspects after busting an illegal fundraising company in a special operation, a senior police officer said on Tuesday.

Officers raided three secret dens at a cooking oil company that was investigated for raising funds illegally by promising high interest rates, said Huang Shouying.

Huang, director of the Economic Crime Investigation Bureau at the Guangdong Public Security Department, was speaking at a news conference in Guangzhou, the provincial capital.

The operation was carried out on May 28 and 29.

"It is, so far, the largest number of suspects who have been detained in a single case in Guangdong," Huang said.

"Police also confiscated 16.67 hectares of land, 22 houses and a number of bank accounts owned by the company after it was found to have defrauded a large sum of money," Huang said.

The company's victims, who number more than 2,000, reportedly come from five provinces and municipalities. The case involves more than 300 million yuan (S$66 million).

In another operation, police froze 542 million yuan in bank accounts after cracking down on an illegal fundraising company in Zhuhai, Guangdong, on June 5.

It is the largest amount frozen in a single case involving illegal fundraising in Guangdong, Huang said.

The Internet company was investigated and found to have raised more than 2 billion yuan illegally in the past two years through promising an annual interest rate of at least 137.5 per cent, he said.

Most of the victims were senior citizens.

Huang said police detained 281 suspects after cracking 35 illegal fundraising cases during a special campaign code-named Lijian No 2 that was staged from May 28 to June 15. These cases involved more than 4 billion yuan.

Officers throughout Guangdong also detained 212 suspects during an operation code-named Lijian No 1, which took place between April 10 and 20.

They cracked 33 illegal fundraising cases involving more than 3.3 billion yuan during this operation, which was launched simultaneously in major Pearl River Delta cities, Huang said.

Police in Guangdong have cracked 175 illegal fundraising cases in the first six months of this year, a year-on-year increase of 250 per cent.

A total of 1,363 suspects were detained between January and June, an increase of more than 200 per cent compared with the corresponding months last year.

Last year, police in the province detained 167 suspects after cracking 60 illegal fundraising cases.

"The Lijian campaigns have dealt a heavy blow to illegal fundraising activities that used to be active in Guangdong, one of the country's economic powerhouses," Huang said.

Yi Xianrong, a researcher at the Institute of Finance and Banking under the Chinese Academy of Social Sciences, called for more concrete and effective measures to be taken immediately to combat illegal fundraising nationwide.

Ren Zhihong, director of the Financial Research Institute at the Guangdong Academy of Social Sciences, attributed the growing number of illegal fundraising events in Guangdong to the large number of economic activities in the province and the popularity of advanced Internet technologies.

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