BEIJING: The founder of a Chinese online peer-to-peer lender has been sentenced to life in prison on charges he defrauded investors of $7.7 billion in one of China’s biggest financial scams.
Ezubo was the biggest competitor in an informal finance industry that Chinese authorities allowed to flourish with little oversight over the past decade to support entrepreneurs who cannot get loans from state banks. A series of lenders have collapsed as economic growth slowed, leaving authorities struggling to defuse protests by depositors.
Ezubo’s founder, Ding Ning, and his younger brother, Ding Dian, were sentenced Tuesday to life by the Beijing No. 1 Intermediate People’s Court for “fundraising fraud,” according to the official Xinhua News Agency.
It said another 24 executives were sentenced to prison terms ranging from three to 15 years.
Two companies affiliated with Ezubo were fined a total of 1.9 billion yuan ($291 million), Xinhua said. It said some defendants also were convicted of offenses including smuggling precious metals and illegal gun possession.
Regulators seized Ezubo in December 2015 on charges of taking deposits without a license. Xinhua said authorities have confiscated the company’s assets to repay depositors but gave no indication how much money was recovered.
Regulators allowed private sector lending to support entrepreneurs who create China’s new jobs and wealth but are largely shut out of lending by the state-owned banking industry. The national bank regulator estimated in 2015 the industry had grown to $1.5 trillion.
Beijing tightened control as defaults mounted following the 2008 financial crisis. The finance industry as a whole has come under tougher scrutiny after a plunge in stock prices in 2015 led to accusations of insider trading and other offenses.
Ding, 34, was a high school dropout who worked at his mother’s hardware factory, where he gained experience running online sales, according to media reports. With no technical or financial training, Ding launched Ezubo in July 2014 and opened marketing offices across China.
Ezubo appeared to gain Beijing’s endorsement when the Cabinet website, gov.cn, published an interview with Ding discussing his life as an entrepreneur. That interview has since been removed.
The seizure of Ezubo prompted protests by depositors who complained the government failed to protect them.
Depositors traveled to Beijing to protest at government offices and the headquarters of state television, which had broadcast advertisements for Ezubo.
Ezubo attracted deposits by promising returns of 9 to 14.6 percent, according to investigators. But authorities say a former executive admitted 95 percent of those borrowers were fictional entities created by Ezubo. In a confession broadcast by state television in February 2016, the executive called the company “a fraud ... a typical Ponzi scheme.”
The court said Ding and other defendants “inflicted huge losses on investors in many parts of China and disrupted the national financial management system,” according to Xinhua.
The Internet has helped lenders attract money from working class or rural depositors, many of them financial novices with little knowledge of the risks involved.
After Ezubo depositors poured out their anger on Chinese social media, police phoned some Internet users to warn them against criticizing the Communist Party online.
One investor from northeastern China who lost 480,000 yuan ($76,000) told The Associated Press that police confiscated her computer and cell phone after she posted online that she might file a petition with the central government.
Earlier, two businesswomen in southern China were sentenced to death in 2012 and 2013 in separate cases on charges of “illegal fundraising.” The penalty for the first was converted to a prison term following an outcry online that it was too severe.
Founder of online Chinese lender sentenced to life for fraud
Founder of online Chinese lender sentenced to life for fraud
Walk for peace: Buddhist monks arrive in Washington after 2,300-mile journey
- Monks started in Texas, walked through nine states
- Walkers trod daily through frigid winter weather
WASHINGTON: Draped in burnt-orange robes, two dozen Buddhist monks arrived in Washington, D.C., on Tuesday on a 2,300-mile “Walk for Peace,” a self-described spiritual journey across nine states that has been cheered on by crowds of thousands. “People want this,” said Joan Donoghue, 59, from Silver Spring, Maryland, who had come out with four of her friends on Tuesday to see the monks. “I went on Sunday in Virginia and I waited outside for a long time and I talked to so many people and they all said the same thing: that our country needs this. We feel divided and people want more kindness and more compassion and more peace.”
The monks began their walk in Texas more than three months ago, at times braving frigid winter temperatures, sometimes with bare feet, to raise “awareness of peace, loving kindness, and compassion across America and the world.” The marchers continued on despite a powerful winter storm that spread a paralyzing mix of heavy snow, sleet and freezing rain from the Ohio Valley and mid-South to New England, compounded by bitter, Arctic cold gripping much of the US Accompanied by Aloka, a rescue dog from India who has gained a following on social media as “the Peace Dog,” their journey comes at a time of growing tensions in the US President Donald Trump’s tough immigration policy has seen surges of immigration agents and National Guard troops deployed in some cities, with both American citizens and immigrants killed by federal agents.
“We walk not to protest, but to awaken the peace that already lives within each of us,” said Bhikkhu Pannakara, spiritual leader of the Walk for Peace. “The Walk for Peace is a simple yet meaningful reminder that unity and kindness begin within each of us and can radiate outward to families, communities, and society as a whole.”
They will spend Tuesday and Wednesday in Washington and end their journey in nearby Annapolis, Maryland on Thursday.
The walk has garnered support from millions of people on social media, with many sharing messages of support for the monks. Supporters have braved snow and rain to meet and offer flowers to the monks as they passed through their cities. In Washington, hundreds of people came out to see the monks as they walked along a road informally known as Embassy Row because of the high number of embassies and diplomatic residences.
Coleman O’Donoghue, 62, of Washington, caught the attention of many of those onlookers as he carried a large flag with the peace symbol on a sea of blue. Tuesday was the fourth time he and his wife, Bonnie, had seen the monks.
“They are beautiful distraction from the chaos that is taking place in the city, the country and in the world right now,” O’Donoghue said. “It gives everyone a second to pause and think about something that is not as stressful as what the chaos is creating.”
While they waited hours just to see the monks for less than a minute, many of the spectators said the camaraderie and good energy made the experience worthwhile.
Julie Segor, 58, of Washington, made friends with a couple she met while waiting. Carl, 61, and Christine Varner, 65, of Maryland, pooled their flowers and fruit with her to give to the monks as they passed.
“It was a shared common interest to see the monks on the peace walk and give them some fruit and flowers,” Christine said.
During their stop in North Carolina, the state’s governor, Josh Stein, thanked the monks for bringing hope to millions with their message of peace, equality, justice and compassion.
“You are inspiring people at a time when so many are in need of inspiration,” Stein said. The Walk for Peace has made stops in Texas, Louisiana, Mississippi, Alabama, Georgia, South Carolina, North Carolina and Virginia. The monks met with spiritual and other leaders after arriving in Washington. They also held an interfaith ceremony at the National Cathedral.
During the ceremony at the cathedral, Kimberly Bassett, the District of Columbia’s secretary of state, presented the monks with a proclamation honoring them on behalf of the Washington Mayor Muriel Bowser.
“Today may mark the end of a 2,300-mile walk but it is not the end of our journey for peace. Your pilgrimage has brought people together across cities, states and communities,” Bassett said.
Although the walk has been positive, it has not been without obstacles. While walking through Dayton, Texas, a truck struck the monks’ escort vehicle, injuring several people, according to local media. Two monks sustained serious injuries and one had his leg amputated.
Despite the accident, the group continued to trek across the US to honor not only their original message of peace but also their brothers.
