Over $27m linked to China Ponzi scam recovered

More than $27 million in criminal proceeds from one of China's biggest Ponzi scams that ensnared more than a million investors have been recovered in Singapore and returned to the Chinese authorities this month.

The Straits Times understands that the monies had been transferred to Singapore for a planned purchase of a $23.8 million Sentosa Cove bungalow, which fell through when one of the scam's key accomplices was arrested.

The seizure was made in May 2016 as part of efforts by the Commercial Affairs Department (CAD) to assist a probe by China's Economic Crime Investigation Department (ECID) into Ezubao, once China's biggest peer-to-peer (P2P) lending platform.

With help from the Chinese embassy, CAD and ECID held joint investigations and found that no local entities were involved in money-laundering activities, said the Singapore police yesterday.

It added in a statement that the $27 million was handed over to the Chinese authorities this month to provide restitution to the victims of the Ponzi scheme, in accordance with Chinese law.

CAD director David Chew described the case as testament to its commitment to "work with foreign counterparts to detect and deter transnational crime and preserve the integrity of our financial system".

"The strong ties between the police forces of China and Singapore are instrumental in ensuring that our financial system is not abused by criminals," he added.

Up to how much Ezubao promised in returns, coupled with an aggressive marketing strategy.

In yuan (or S$14.9 billion) of investments that the scheme attracted in less than two years, after it was set up in 2014.

The number of investors who were swindled, according to Chinese media reports, and who are unlikely to recoup their 38 billion yuan in estimated losses.

Ezubao, which was set up in 2014 by parent company Yucheng International Holdings Group, became China's largest peer-to-peer platform which used an aggressive marketing strategy promising returns of up to 14.6 per cent.

Within less than two years, it attracted more than 74.7 billion yuan (S$14.9 billion) in investments.

But investigations into the firm revealed it had made up fake investment projects and pocketed the funds, causing the shutdown of Ezubao in 2016 and sparking a nationwide crackdown on peer-to-peer lending in China.

Last September, the two leaders of the Ponzi scheme - Ding Ning, chairman of Yucheng group, and his brother Ding Dian - were each handed lifetime jail terms by a Beijing court, while 25 others were sentenced to between three and 15 years in jail.

One of them included Yucheng's former president, Zhang Min, who was reportedly showered with expensive gifts by Ding Ning, including a 12 million yuan pink diamond ring, luxury limousines, watches and more than 550 million yuan in cash. Another one of these gifts was a Sentosa Cove bungalow in Singapore.

Before Zhang was arrested by the Chinese authorities, she reportedly attempted to buy a $23.8 million Lakeshore View bungalow in Sentosa Cove between October 2015 and January 2016.

A property agent and a lawyer acting on Zhang's behalf have been convicted and fined $10,000 each for not notifying the Singapore authorities that the monies involved in the purchase could have come from criminal proceeds.

According to Chinese media reports, about 1.15 million investors who were swindled are unlikely to recoup their 38 billion yuan in estimated losses and restitution is likely to be limited.