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Minnie Chan

Sale of five-star funeral services traps thousands

A pyramid-selling scam based on investing in 'five-star' funeral services in Hengyang , Hunan province , managed to trap thousands of unwary people, stripping them of 120 million yuan over the past nine months, victims said yesterday.

The Taiwanese mastermind  and his accomplices have since fled.

Liu Aiping , a 45-year-old Changsha  investor who spent 20,000 yuan to invest in a  grave site in Guangfu Cemetery Park in Hengyang city last year,  as well as working as a part-time saleswoman for the pyramid scheme, said she discovered that her Taiwanese boss, Liu Xiaojian , and his men were swindlers last July.

'My co-workers and I realised that we were trapped when our boss and all his men disappeared on July 19,' said Ms Liu. 'One of my friends told me Liu had also been sought by Guangdong's  Huiyang  government on charges of speculating in cemetery land.'

The 34-hectare Guangfu Cemetery Park is a government-supported project that offered 'five-star' funeral services.   In 2002, the construction and management arms  were contracted to Yongsheng Company, which Liu owned.

The project was completed in 2005, and the price of grave sites ranged from 8,000 to 250,000 yuan.

Liu set up 11 branches in Hengyang, Changsha, Xiangtan , Binzhou , Zhuzhou , Shaoyang  and other cities in the province and recruited 1,725 staff to sell 29 kinds of  grave sites.

Investment in the plots, which were expected to appreciate in value because of limited land supply,  attracted thousands of laid-off and retired workers. According to the People's Daily, Yongsheng Company sold more than 6,500  grave sites in 2005 and last year, but only 296 bodies had been buried in the plots.

More than 95 per cent of the sites were open graves, despite China's civil law stipulating that only people holding both death and cremation certificates could buy  cemetery space.

The report said Hengyang municipal government allowed the illegal purchase of grave sites, even though the Civil Affairs Bureau received more than 800 complaints last year. The scam only wound up when the provincial government ordered local officials to investigate last month.

It said many municipal government departments had been involved in the scam because the local government had mobilised police, state-owned banks, land resource and other offices to co-operate with Liu when he built the  project.

'We were deceived because Yongsheng management and local government officials all said prices of graves would appreciate due to limited land in our country,' Ms Liu said.

A spokesman from Hengyang municipal government said they had investigated the case, but refused to make any comment.

Money pit

Victims rope in relatives and friends after being convinced they could all get rich quick

Number of burial plots sold for up to 250,000 yuan in the past two years 6,500



Pyramid scam costs investors 126m yuan