'Loan shark gang' held in 8m yuan fraud case
Seven suspects who offered loans have been detained for allegedly defrauding and blackmailing five people.
Shanghai police said on Tuesday that the sums involved topped 8 million yuan (US$1.2 million).
One of the victims, a man surnamed Xu who lives in Songjiang District, was lent 200,000 yuan but ended up owing the gang over 1 million yuan with his property to be used as security for the loan.
Gang members operated their illegal business through a loan company, which had no certificate, police said. Xu was persuaded to sign an IOU note for 468,000 yuan if he was unable to pay back his 260,000 yuan on time.
Xu was allegedly then made to return the debt before the due time and since he could not, he ended up owing 1.26 million yuan to the gang, who then demanded he hand over his house.
Documents involved with Xu's case.
Xu turned to Songjiang police last September after his family wouldn’t let him "mortgage" the property.
The gang allegedly were also responsible for four similar cases in Putuo and Fengxian districts and Pudong. Police said the suspects have confessed.
Frauds of this type usually involve loan seekers who own more than one property, police said, because of the usually high value of the real estate involved.
Meanwhile, five suspects based in Pudong have also been detained for running a loan scam.
One of the victims, a man surnamed Gu who lives in Yangpu District, borrowed 50,000 yuan from this gang but ended up owing 1.64 million yuan within two and a half years, Yangpu police said.
