Fake bank scams Chinese customers out of £20 million

A fictitious bank in eastern China tricked customers out of almost 200 million yuan (£20 million) before police shut it down

By the time police were alerted to the operation some 200 people, mostly small business owners, had left deposits of between 100,000 yuan and 20 million yuan
By the time police were alerted to the operation some 200 people, mostly small business owners, had left deposits of between 100,000 yuan and 20 million yuan Credit: Photo: Alamy

A fake bank that closely resembled a genuine establishment cheated Chinese depositors out of almost 200 million yuan (£20 million) before it was closed by authorities, state media reported on Thursday.

The "bank", called Nanjing Mou Village Economic Cooperation Unit, swindled customers in the eastern city of Nanjing for around one year before police learned of the operation, according to a report by Xinhua, a government-run news agency.

Although it physically resembled a real bank – with uniformed clerks behind counters, LED screens displaying financial information and even fake credentials – the operation was licensed as an agriculture consultancy and not as a financial institution.

One legal representative and four managers have been detained on suspicion of illegally absorbing public money.

By the time police were alerted to the operation some 200 people, mostly small business owners, had left deposits of between 100,000 yuan and 20 million yuan, lured by the promise of attractive interest rates. Police are still seeking victims of the con.

One victim, Mr Wang from Hangzhou, Zhejiang province, deposited 12 million yuan into the "bank". He was promised a two per cent interest on his deposit each week.

But after the interest ceased accruing after four weeks Mr Wang travelled to Nanjing. When the "bank" failed to return his money he alerted police.

Many were not surprised at the fake bank's existence – China has already witnessed a number of audacious scams, including fake Apple stores where staff believed they were hired by the real company, and a fake university that students attended for four years.

"There are so many frauds! What the hell are our mystical Chinese 'responsible departments' doing?" wrote microblog user blogsn2011 on Sina Weibo.

It was unclear on Friday if victims would be able to claim back their deposits.

In 2012 rice trader Lin Chunping took fakery to a new level when he claimed he bought an invented US bank.

Mr Lin became a local hero when it was reported that he had taken over Atlantic Bank, allegedly based in Delaware, for $60 million (£40 million) – he was even awarded a prestigious political position. But when Chinese reporters failed to locate Atlantic Bank Mr Lin was exposed as a fraud. Last year he was sentenced to life in prison.

In 2014 three farmers in Dengzhou, a city in central China, tried to forge an entire fake government: the Dengzhou People's Government. It operated for several months and undertook a recruitment drive before police shut the venture down.