11 detained over China Ponzi scheme

NANJING, Jan. 24 (Xinhua) -- Police in Nanjing have detained 11 investors in a Ponzi scheme for organizing illegal gatherings and disturbing public order.

Another 11 received warnings.

The people used instant messaging services to organize and encourage other investors in Qbao.com to illegally gather near government office buildings or in business districts, according to local police.

Police urged the investors to make their appeals through proper channels, not to believe or spread rumors, and to avoid illegal activities.

Local police said they are doing their best to retrieve the investors' losses.

Zhang Xiaolei, who controlled Qbao.com, turned himself in to police in Nanjing on Dec. 26.

Zhang founded Qbao.com in 2012 and used it as a platform to accumulate money from investors lured by hefty returns, police said, noting Qbao.com used funds from new depositors to pay off old debts.

Zhang faked investment projects and companies, promising hefty annual returns.

Before Zhang turned himself in, the website had about 1 million active users daily. The unpaid principal totals 30 billion yuan (4.7 billion U.S. dollars).

Such Ponzi schemes could affect financial and social stability and severely hurt the real economy, said Sun Guoxiang, professor of criminal law at Nanjing University. Enditem