Economy

14 held for $20m Ponzi fraud of Chinese tea

(Xinhua)
Updated: 2011-06-19 10:04

HANGZHOU - Prosecutors have arrested 14 people in east China's Zhejiang province for unscrupulous speculative practices, local judicial authorities said.

Li Xinghua, along with 13 other suspects, was arrested Friday at the approval of the People's Procuratorate of the city of Hangzhou, capital of Zhejiang Province, on charges of illegally absorbing public deposits.

Prosecutors said the 14 suspects used the Yunnan-based Hongru Tea Industry Co. Ltd., Zhejiang-based Hongru Tea Co. Ltd. and Hong Kong-based Hongru Cultural Development Holding Group to raise nearly 127 million yuan ($19.6 million) from more than 1,000 investors from June 2007 to May 2011.

The investors thought they were buying the initial offerings of a listed company and hoped to get impressive returns on their investments.