2 suspects detained for Ponzi fraud targeting retirees

Police are warning the public that Ponzi schemes increasingly target retirees and have developed some new ways to seduce investors.

Two suspects have been detained in a Ponzi scheme which has illegally taken over 300 million yuan (US$47 million) from the public, Shanghai police said on Tuesday.

Over 8,000 people have fallen victim to the scheme, run by an “investment management firm” called Jieliang, which has been based in Putuo District since February 2015, police said.

The case was solved last month after police received complaints from some investors.

The company allegedly drew investors by promising an 8 to 12 percent return on their “financial products." Around 80 to 90 percent of the victims were retirees.

The suspects illegally acquired the private data of clients from a few local insurance companies and approached them by phone and SMS, police said.

A 55-year-old man surnamed Gu, who lives in Jing’an District, was one of the victims.

He told Shanghai Daily that he invested 20,000 yuan in February and expected a monthly return of 133.30 yuan. He called police in April after he didn’t receive the money for that month.

“The staff went out of touch, and their office was closed,” he said. “I was being greedy and I do regret it.”

Police said they have engaged the insurance regulatory commission as well as other financial industry regulators to crack down on illegal leaks of private client data.

Zhou Haifeng, a police officer experienced in dealing with Ponzi schemes who works at the Shanghai Public Security Bureau, said such schemes increasingly target retirees.

“Besides sweet talking, scammers accompany the retirees to tea drinking and shopping and don’t hesitate to please them with gifts such as farm produce and tourism opportunities,” he said.

Police said they have been keeping an eye on financial firms in business buildings which many retirees go through with gifts in their hands.

Targeting insurance company clients is one of the latest tricks played by Ponzi scammers, while people should also take heed of shopping websites where customers are promised high returns for purchases, Zhou said.

Special Reports