Ant scam ends in sentence of death

By Yang Lifei  |   2008-6-19  |     NEWSPAPER 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, Jiangsu Province, has ruled.

The court heard that Xu Guancheng had cheated investors out of money to set up an ant-breeding company.

Xu Guanqing, the company's general manager, was handed a life sentence for his role in the scam. Both had their property confiscated by the court.

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 fetch high prices.

Xu Guancheng, who set up Nanjing Guancheng Company in 2003, 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 Guancheng and his accomplices realized they were no longer able to make ends meet.

However, they continued to tell investors the business was doing well.

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