Actor arrested over 1b yuan forestry scam

PUBLISHED : Friday, 26 October, 2007, 12:00am
UPDATED : Friday, 26 October, 2007, 12:00am


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A former mainland television actor, once feted at the Great Hall of the People for his entrepreneurial spirit, has been arrested in Inner Mongolia over a 1 billion yuan forestry scam.

Seven accomplices were also arrested in the fraud case, Xinhua reported yesterday.

Chen Xianggui , 43, a Heilongjiang native who is best known for his role as a village party head in the popular CCTV drama Liu Laogen 2, is accused of duping more than 30,000 people from 12 provinces and municipalities out of 1.2 billion yuan by promising big profits from a timber project in Inner Mongolia.

The Xinhua report said Chen and co-accused Liu Yanying , manager of Wanli Forestation, charged investors about 24,000 yuan per hectare to buy into their tree-planting scheme. They promised to quadruple investors' money within a decade.

Local officials and farmers said it would be almost impossible to generate such profits from the project.

Heilongjiang reporter Lin Xiaolei , who has written a series of reports since 2005 casting doubt on the scheme, said Chen put up photos of himself with former president Jiang Zemin and a well-known TV hostess in company branches across the mainland to dupe people into investing in the project.

'All the victims were retirees in their 50s and 60s who had thousands of yuan of idle money,' she said. 'It's a pity that none of them believed my reports until the case broke.' Lin said the Heilongjiang authorities banned all Wanli's advertising in 2005 because they were deceptive, but the provincial police did not arrest Chen or his staff, leaving them free to continue soliciting money.

Chen founded Wanli Forestation in 2004 and soon set up more than 100 branches around the mainland based largely on his ability to create a reputation for himself.

He even held two award ceremonies at the Great Hall of People in Beijing last year to honour entrepreneurs, which reinforced his public image.

'The reason he could be so successful was because people in the northeast trust state leaders and public figures,' Lin said.

The case is not the only example of such a scam on the mainland. This year, movie star Ge You was criticised for acting as the spokesman for a forestry company that was also involved in illegal pyramid selling with bogus ads for extorting 1.6 billion yuan.

Prominent playwright Sha Yexin voiced anger over the recurring fraudulent schemes.

'First of all, too many people are greedy and hope to reap without sowing,' Mr Sha said. 'But the Chinese are traditionally used to trusting state leaders, as well as believing everyone who claims to have a connection with them.

'That gives illegal operators the chance to take advantage, and both the people and government should learn the lessons.'

Too good to be true

The scam promised to quadruple the money of investors within a decade

Number of provinces and municipalities where more than 30,000 victims were duped into parting with their money: 12