Why a Chinese Ponzi scheme that preyed on poor farmers should scare us much more than Bernie Madoff’s fraud – FINANCIAL NEWS-ecozik.com
Home / Insurance Tips / Why a Chinese Ponzi scheme that preyed on poor farmers should scare us much more than Bernie Madoff’s fraud

Why a Chinese Ponzi scheme that preyed on poor farmers should scare us much more than Bernie Madoff’s fraud

This image made from undated video released by China Central Television (CCTV) shows Ding Ning, owner of Ezubao, during an interrogation in an unknown location. Chinese police arrested 21 employees at China's largest online finance business on suspicion of fleecing 900,000 investors for $7.6 billion, in what could be the biggest financial fraud in Chinese history.

One evening in December 2008, Bernie Madoff sat his sons right down to tell them he had swindled hundreds of his clients out of billions of dollars. He knew the game was up. He’d already written last cheques to close family and friends for $137 million to state sorry – cheques that were never cashed.

madoffWithin hours, the happy couple had informed the FBI, and agents had appeared at the Madoff home in New York’s Upper East Side.

Lots of people had been taken in: from Steven Spielberg to Kevin Bacon, from former Ny governor Eliot Spitzer to City superwoman Nicola Horlick. In total, more than $65 billion is estimated to have been lost within the fraud.

The story dominated the headlines for months until Madoff himself was jailed for 150 years in June 2009. His eldest son Mark committed suicide in the apartment 2 yrs after Bernie was jailed; younger son Andrew died of cancer in 2014, having blamed his father in a magazine interview for “killing me slowly.” His wife Ruth, who had four homes and three boats, was photographed late this past year furnishing a two-bedroom Connecticut apartment with items purchased at Ikea.

Little wonder the Madoff saga has been depicted now on U.S. television inside a two-part miniseries starring actors Richard Dreyfuss and Blythe Danner as Bernie and Ruth. Next year, Robert de Niro and Michelle Pfieffer will require on the same roles in a film form of the saga called The Wizard of Lies.

The lessons of Ezubao are much more important compared to those of the Madoff fraud

But, as the passion for that Ponzi scheme is undiminished almost eight years on, the spotlight on a similar fraud has dimmed after just a couple days.

This is even though the Ezubao scheme, which has been uncovered in China, could have much bigger ramifications than anything Madoff did.

Greg Baker/AFP/Getty Images

The 34-year-old Ding Ning only founded Ezubao in 2004. But he was quick to manoeuvre his business in to the heart of Chinese society.

Last year, Ezubao, a peer-to-peer lending platform which claimed to match investors with companies searching for finance, sponsored the online broadcasts from the National People’s Congress with a subsidiary of state-owned news agency Xinhua. Using its logo adorning the Great Hall of those in Beijing, how could savers doubt it was a reliable brand? Ding also were able to secure advertising slots on state-owned CCTV. Also, he encouraged employees to create ostentatious displays of opulence. In November, some 800 million RMB ($169 million) was distributed to staff, in part to ensure they wore designer clothes and jewellery to work and made the company look more successful. But Ding’s “perp’” walk on Chinese state television this week – following his arrest along with 20 fellow executives – suggests Ezubao was nothing more than a financial house of cards.


About admin

Leave a Reply

Your email address will not be published. Required fields are marked *