(MENAFN- ProactiveInvestors - UK) One of the biggest financial frauds in Chinese history has been busted - a $5.3bn Ponzi scam - according to news reports today.
The authorities have arrested 21 people at a peer-to- peer lending group concerning a scam which is alleged to have led to almost one million people losing out.
A ponzi or pyramid scam sees the perperator pay a return from monies already paid to them by investors rather than any profit made by the operator of the scheme.
It is a fraudulent way of simply moving money around.
At the P2P group called Ezubao and perhaps in a nod to Egyptian mummies Chinese police have reportedly used two diggers for almost 24 hours to retrieve paperwork that was stashed underground.
Ezubau launched in July 2014 and attracted business by offering investors yearly returns of up to 15%. It rapidly became China's largest online financing platform.
Among those arrested were Ding Ning chairman of Yucheng Group which carried out the launch of Ezubao two years ago.
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