Man gets death sentence for ant-breeding scam

By Yang Lifei  |   2008-6-18  |     ONLINE EDITION

A BUSINESSMAN was sentenced to death with a two-year reprieve yesterday for swindling more than 33 million yuan (US$4.7 million) from investors in a bogus ant-breeding scheme, a court in Nanjing City ruled, according to Xinhuanet.com

The Intermediate People's Court in Nanjing, the capital of Jiangsu Province, ruled that Xu Guangcheng had cheated investors out of money to set up an ant-breeding company. His property was also confiscated.

Xu Guangqing, the company's general manager, was handed a life sentence for his role in the scam. His property was also confiscated by the court.

The report did not say if the two men were related.

Ma Rumei, a financial supervisor at the company, was sentenced to five years in jail and fined 500,000 yuan.

Ants are used in some traditional Chinese medicines and can sell for high prices.

Xu Guangcheng, who set up Nanjing Guangcheng Company in 2002, had promised investors annual returns of up to 39 percent for buying ants and ant-breeding equipment. He told investors a kit of ants selling for 460 yuan would bring a return of 640 yuan one year later.

In October 2004, the company lowered promised returns to 17.39 percent.

Between January 2004 and March 2005, Xu and his accomplices realized they were no longer able to make ends meet. However, they continued to swindle investors by telling them the business was doing very well.

More than 800 investors were cheated out of a total of 33 million yuan in the scam.