China court sentences one to death, one to life in prison in fund-raising scam

10:16, January 01, 2011      

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A court in east China's Jiangsu Province sentenced a man to death and another to life in prison Friday for illegally raising up to 4 billion yuan (606 million U.S. dollars) in a fraudulent investment scheme.

Another 11 suspects were given jail terms ranging from two-and-a-half to 10 years for collusion in the fraud, which caused losses of 650 million yuan (98 million dollars) to 14,822 investors, the Intermediate People's Court in the provincial capital, Nanjing, said in a statement.

According to the statement, Sun Haiyu and Hu Zhen jointly set up a company, Nanjing Runzai Biology Co., Ltd. in January 2004 and began soliciting investments from the public in the name of planting glossy ganoderma, or reishi mushrooms, which are widely used in traditional Chinese medicine.

The judge said the company exaggerated its profits in planting glossy ganoderma and fraudulently claimed that the investment was risk free.

The duo, together with 11 accomplices, raised more than 4 billion yuan from April 2004 to July 2008.

Sun was sentenced to death for the crime of illegal fund-raising by fraudulent means, while Hu was sentenced to life imprisonment.

Source: Xinhua
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