A Chinese man has been sentenced to a term of life imprisonment for orchestrating a Ponzi scheme that defrauded investors out of nearly $5 million. Wang Xiaoqing, 30, received the sentence from a Chinese court in southeast China’s Zhejiang province. Xiaoqing promised investors double-digit interest rates in exchange for an investment that would purportedly be used to build a luxury hotel. Instead, Xiaoqing simply used investor funds to make Ponzi-style payments and to sustain his lavish lifestyle in classic Ponzi scheme fashion. In addition to this life sentence, all properties belonging to Xiaoqing will be forfeited to the government.
While a corresponding sentence in the United States would have likely been no more than ten years, the sentence handed down to Xiaoqing is consistent with the hard line previously taken by Chinese authorities against financial fraud. While the true pervasiveness of financial fraud in China is not readily ascertainable due to reporting prohibitions and government secrecy, at least two individuals have received death sentences in recent years for their role in masterminding Ponzi schemes: Ying Wu received a death sentence after being convicted of operating a $60 million Ponzi scheme, while Haiyan Lin was sentenced to death by firing squad for a $70 million fraud. (Wu subsequently saw her sentence commuted to a life sentence). China was also reported to have recently executed a an convicted of operating a $400 million scheme and subsequently referred to as “China’s Madoff.”