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Lending scheme fraudster jailed for life

Xinhua, July 5, 2016 Adjust font size:

A court in east China's Zhejiang Province has sentenced a man to life behind bars for running a fake peer-to-peer lending scheme that conned over 88 million yuan (about 13 million U.S. dollars) from 1,200 investors.

Cai Jincong illegally raised more than 200 million yuan through Zhejiang Yinfang Investment and Management Co., where Cai fabricated investment products promising over 20 percent in annualized returns, the court said on Tuesday.

Cai, who was under a lot of debt, founded the P2P lending platform in October 2013. It offered returns on investment of up to 50 percent.

The funds were used to service Cai's own debt and fund the operation of the P2P platform. Cai turned himself to police on January 20, 2015.

Regulators in China have been cracking down on illegal fundraising amid an Internet financing boom, after a number of online lending and fundraising schemes turned out to be fraudulent.

The most high-profile fraud involved an online P2P firm called Ezubao, which was found earlier this year to have cheated about 900,000 investors out of more than 50 billion yuan. An executive from the parent company has admitted that it was nothing but a Ponzi scheme. Endi