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Monday
May212012

Death Sentence Overturned for Chinese Woman Convicted of $60 Million Ponzi Scheme

Following public outcry, China’s supreme court overturned a death sentence for a former Chinese businesswoman who once ranked as China’s sixth-wealthiest woman before she was convicted of operating a Ponzi scheme that bilked investors out of 380 million yuan, or approximately $60 million.  After a re-trial, Wu Ying was sentenced to death with a two-year reprieve – a common sentence in China for those who are deemed to have sufficiently reformed.  Under Chinese law, individuals sentenced to death have the opportunity to have their sentenced commuted to life sentences if they do not commit a crime after two years.

From May 2005 to February 2007, Ms. Ying raised approximately 770 million yuan, or $121 million, from investors who thought their funds would be used to start companies, extend loans, or prop up cashflow at existing businesses.  In return for their contribution, investors were told they could expect annual rates of return of up to eighty percent.  While initially Ms. Ying solicited family and friends, she expanded the scheme in 2006 when she formed Bense Holdings Group Co. and invited outsiders to invest, promising even higher rates of return.  Instead, according to Chinese authorities, she used the funds to service existing debt and fund extravagant purchases such as real estate and a Ferrari.  After being arrested, Ms. Ying confessed and disclosed that she had bribed several government workers in connection with the scheme.  She was then convicted of promising high interest to attract money for fictitious investment projects and sentenced to death.

All death sentences are reviewed automatically by the Supreme People’s Court, which announced it would review the case “with care”.  It then rejected the death penalty in April, and ordered the case returned to Ms. Ying’s home province of Zheijiang for re-sentencing.  In addition to the reprieve, the court also ordered that Ying forfeit all of her personal property and be stripped of all political rights for life.