A man who launched a fake ant-breeding business promising investors tempting returns has been sentenced to death for swindling his mostly poor victims of 3 billion yuan.
Wang Zhendong and his staff would sell a bagful of ants worth 200 yuan to investors in return for 10,000 yuan, and ask them to breed the creatures and return in 37 days' time. He promised them a return on their investment of up to 60 per cent.
He marketed his firm, Donghua Trading - which had been granted a business licence - as 'a private bio-hi-tech enterprise' with a core business in wine and medicine, and beverages made from mature ants. In traditional Chinese medicine, black ants are steeped in tea or soaked in liquor as a natural remedy for ailments such as arthritis.
Having started out in his northeastern home town of Yingkou , Liaoning province , in 2002, Wang's ant-breeding business spread to 13 neighbouring cities over the next three years.
Lured by lavish newspaper and TV advertising and the promise of a quick profit, more than 10,000 people, most of them poor villagers or laid-off urban workers, poured their savings into the scheme. Some even borrowed to invest in it.
Dong Bingyou , a laid-off worker from Fushun , invested 100,000 yuan. 'It looked like a big company with a good reputation and deep pockets. Mr Wang was a local celebrity,' Mr Dong was quoted by the People's Daily as saying.
But the scheme was a fraud from the start. Wang used the money from new investors to repay previous investors, and claimed to have a chain of hotels, a firm making telephone cables and a textiles business.
When the scheme grew too big for him to keep up the repayments, police began investigating Donghua in June 2005.
Only 10 million yuan of the money raised by Wang was recovered. He used 798 million to pay off personal debts, make loans to other people and promote the ant scam. The advertising bill was 100 million yuan.
One investor was so depressed when the scam was exposed that he committed suicide, Xinhua reported.
Wang was sentenced to death by the Yingkou Intermediate People's Court on Wednesday. Fifteen Donghua managers were jailed for up to 10 years and fined up to 500,000 yuan.
Hu Xingdou , a Beijing-based sociologist, said disadvantaged people were easy prey for such scams because they were not well informed.
10,000 investors cheated
3 billion yuan involved
60% return promised for breeding ants in 37 days
200 yuan worth of ants were sold for 10,000 yuan
13 cities and counties in Liaoning targeted
1 death sentence for boss Wang Zhendong
15 managers jailed 5-10 years