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Hundreds hit by 1b yuan jade scam

2014-07-23 09:32 Shanghai Daily Web Editor: Si Huan

Police in southwest China's Yunnan Province are trying to retrieve jade treasures that hundreds of people lost in a 1 billion yuan (US$160.10 million) scam.

A 33-year-old suspect, Zhong Xiong, was held by police in May and arrested the following month over what is said to be the biggest jade fraud case in China since 1949.

Police say Zhong Xiong presented himself as a rich and powerful man, living an extravagant lifestyle, driving luxury cars, owning a string of restaurants, clubs and pawn shops and cultivating friendships with influential figures.

This image lured hundreds of jewelry traders and individual lenders, said one of the scam victims, Su Peng.

They came from major jade trading center Yunnan, plus other Chinese provinces and even across the border in Myanmar.

Zhong is said to have told victims that he knew wealthy clients in Shanghai and Beijing who wanted artefacts made from the highest quality jade. But after collecting the jade items, Zhong disappeared without paying for them, the Oriental Morning Post reported yesterday.

Zhong is also said to have persuaded victims to lend him cash, ostensibly to help friends with cashflow problems, giving them what he claimed were expensive jade items as collateral.

However, these turned out to be ordinary goods from souvenir shops and the lenders only received the interest on their loans, the paper reported.

Police said Zhong had borrowed money from loan sharks since 2012, but he always spent more than he borrowed.

He would use money borrowed from one lender to pay another's interest and sold expensive jade items to pawn shops, police said.

Peng Fan, leader of the police investigation team, said officers received a tip-off on April 24.

Within two days, 67 people had reported the fraud, said Peng.

Zhong was held in Yunnan's provincial capital Kunming on May 3.

He has admitted his guilt, said Peng.

Some of the victims believe suspect Zhong is a front for a big boss.

"It would have been impossible for him to complete this fraud alone based on his abilities," claimed Su.

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