How did gold-clad copper defraud 20 billion from financial institutions? The details of "the largest fake gold fraud in history" are revealed

The Paper

2024-06-01 10:04Posted on the official account of Shanghai The Paper

On May 28, the Intermediate People's Court of Wuhan City, Hubei Province, in the first instance publicly pronounced a verdict in accordance with the law on the case of contract fraud, fraudulent loans, illegal issuance of loans, bribery of non-state functionaries, bribery of non-state functionaries, embezzlement of duties, and counterfeiting of registered trademarks by 18 defendants, including Wuhan Jinhuang Jewelry Co., Ltd. (hereinafter referred to as Wuhan Jinhuang), Wuhan Jinhuang Industrial Group Co., Ltd., Hefei Boyin Investment Consulting Co., Ltd. and Jia Zhihong.

The defendant, Jia Zhihong, the former legal representative and actual controller of Wuhan Jinhuang Industrial Group Co., Ltd., was sentenced to life imprisonment, confiscation of all personal property, and deprivation of political rights for life for the crimes of contract fraud, bribery of non-state functionaries, and bribery of non-state functionaries. The other defendants were sentenced to fixed-term imprisonment ranging from three years and two months to 12 years and corresponding property penalties, and the defendants Wuhan Jinhuang Jewelry Co., Ltd., Wuhan Jinhuang Industrial Group Co., Ltd., and Hefei Boyin Investment Consulting Co., Ltd. were sentenced to corresponding fines.

On the same day, the Wuhan Intermediate People's Court temporarily put an end to this shocking fraud case in just two paragraphs, but the Wuhan Intermediate People's Court did not disclose the details of the case.

Recently, The Paper interviewed relevant people who had participated in two court trials, and they restored some of the details of the Wuhan Jinhuang fraud case according to the indictment of the public prosecution and on-site debate.

According to the trial information, as of June 2020, Wuhan Jinhuang had a total of 105.77 tons of fake gold in the warehouse, and successively defrauded 15 financial institutions or units such as Yantai Huanshan Road Branch of Hengfeng Bank of Hengfeng Bank of a total of 25.345 billion yuan through fake gold pledge guarantee and other schemes, of which 24.755 billion yuan was defrauded of loans from financial institutions, and as of June 2020, a total of 14.628 billion yuan has not been returned, of which 14.147 billion yuan has been lost by financial institutions.

Manufacture: Fake raw materials are engraved with the gold exchange number

Wuhan Jinhuang pledged fake gold as a guarantee, and there must be fake gold first.

According to the trial information, under the instruction of Jia Zhihong (chairman of Wuhan Jinhuang, suspected of fraudulently obtaining loans, detained on September 8, 2020), Huang Yi (assistant to the chairman of Jinhuang Group, suspected of fraudulently obtaining loans, detained on August 5, 2020), Wang Jun (general manager of Wuhan Jinhuang, suspected of fraudulently obtaining loans, detained on August 5, 2020), and Hu Qiao (financial director of Wuhan Jinhuang, suspected of fraudulently obtaining loans, detained on September 8, 2020), Qian Lei, manager of Wuhan Jinhuang's sales department (suspected of fraudulently obtaining loans, embezzlement, detained on September 8, 2020) is responsible for purchasing and customizing fake gold.

According to a relevant person told the surging news, "Wuhan Jinhuang's fake gold is purchased from Shenzhen, that is, there is gold on the surface, and copper inside, and the general mass spectrometer is undetectable, if you want to detect, you can only cut each piece from the middle, so the cost of testing is very high, and it is impossible to detect each piece, which provides a lot of space for counterfeiting, and such fake gold pledge cases will occur every few years in China." People like Wuhan Jinhuang who go to Shenzhen to buy fake gold can eat more than 10 million yuan in kickbacks, and you think about how much profit there is to make people take risks."

According to the trial information, from 2015 to 2019, Qian Lei took advantage of his position in charge of purchasing fake gold to take the method of inflating the price, and defrauded Wuhan Jinhuang of more than 1,400 yuan many times.

After Qian Lei purchased the fake gold, Xu Zhengquan, the manager of the investment department of Wuhan Jinhuang (who was detained on November 23, 2020 on suspicion of fraudulently obtaining loans), provided Qian Lei and the financial staff with the style and number of the gold raw materials of the Shanghai Gold Exchange, which were used to engrave on the surface of the fake gold and make false gold delivery orders.

Wuhan Jinhuang still bought a lot of real gold, and the trial information showed that 2.773 billion yuan of the fraudulent funds were transferred to the Shanghai Gold Exchange.

Packet dropping: Replace fake gold with real gold when sending for inspection

After the fake gold is put into storage, Zhai Fengqun, the director of the sending and receiving department of Wuhan Jinhuang Workshop, is responsible for the counterweight, sending and receiving of real and fake gold. Zhang Rusong, director of Wuhan Jinhuang Workshop (suspected of fraudulently obtaining loans, detained on August 5, 2020), and Song Gaofeng, director of the inverted mold department (suspected of fraudulently obtaining loans, detained on August 5, 2020), carried out real and fake gold swaps in the gold sampling and smelting process.

Zhang Rusong is responsible for the on-site fake gold monitoring and package dropping, the on-site pledge gold smelting monitoring camera (the process of transferring gold is deliberately not videotaped), and he and Song Gaofeng, Zhai Fengqun, Tang Jie formed a gold detection team to complete the inspection and testing of the pledged fake gold, and pledged the fake gold atmosphere in two ways.

After that, Tang, the settlement officer of Wuhan Jinhuang Finance Department, was responsible for the custody and registration of fake gold, and adjusted the spectrum detector in the gold spectrum detection process to issue a false report.

In addition, insurance companies have become an indispensable part of the counterfeiting process.

The reason why Wuhan Jinhuang pledged gold to defraud the loan was because it adopted the "gold + insurance policy model".

In terms of the operation process, Wuhan Jinhuang stored the pledged gold in the bank safe, but the key and password of the safe deposit box were held by the trust institution, so Wuhan Jinhuang proposed that all gold pledges must be insured by the insurance company, which is why the insurance company has a way to underwrite the weight and quality of the pledged gold.

According to the trial information, insurance officer Shi Wei (suspected of fraudulently obtaining loans) was responsible for facilitating the Wuhan Branch of Chinese People's Property Insurance Co., Ltd. (hereinafter referred to as PICC) and China Dadi Property Insurance Co., Ltd. (hereinafter referred to as Dadi) Insurance Hubei Branch to add special clauses to the insurance policy to underwrite the quality and weight of the pledged gold, and directed the gold pledge on the spot, from which a total of 28 million yuan was obtained.

PICC personnel are directly involved. Zou Dachun, former general manager of the Wuhan Dongxihu Branch of the Chinese People's Insurance Company (Jia Zhihong's brother-in-law, suspected of fraudulently obtaining loans), knew that Wuhan Jinhuang had pledged fake gold as a guarantee, but still agreed to continue to handle the property insurance underwriting procedures with special clauses for the unit, prompting him to successfully obtain loans by fraud.

According to the court introduction, Zou Dachun printed the business card of PICC Wuhan Dongxihu Company for Shi Wei, an insurance intermediary, and arranged for Dongxihu Company personnel to form a Jinhuang business team to follow Shi Wei's arrangement to carry out relevant work.

According to the trial information, Wuhan Jinhuang pledged a total of 105.77521 tons of fake gold in the bank vault, which were identified as copper alloys.

15 financial institutions were defrauded, and Hengfeng Bank lent more than 6.5 billion yuan

The trial information also shows that as of June 8, 2020, through fake gold pledge guarantees and other schemes, a total of 25.345 billion yuan has been defrauded from 15 financial institutions or units such as Yantai Huanshan Road Branch of Hengfeng Bank, of which 24.755 billion yuan was defrauded of loans from financial institutions.

In addition, after auditing, the main uses or whereabouts of the funds fraudulently obtained by the defendant Wuhan Jinhuang and others are as follows: repayment of loan principal and interest of 17.462 billion yuan, payment of insurance premiums, gold leasing fees and other expenses of 322 million yuan, payment of consulting fees, Consulting fees and arrangement fees of 92 million yuan, cash withdrawals and consumption of Jia Zhihong and other personal accounts of 18 million yuan, payment of equity investment of 3.689 billion yuan, transfer of 2.723 billion yuan to the Shanghai Gold Exchange, transfer of 343 million yuan to non-related parties, payment of trust protection fund of 88 million yuan, payment of trust income right transfer of 378 million yuan, after the transfer of funds into Jinhuang Jewelry and Jia Zhihong's control or control of enterprises and personal accounts for operating expenses and other expenses of 76 million yuan.

As of June 8, 2020, a total of 14,628.89 million yuan had not been returned, of which a total of 14,147.65 million yuan had been caused to financial institutions.

The trial information shows that the public prosecution organs examined and ascertained in accordance with the law that Wuhan Jinhuang, Jia Zhihong and others had taken fake gold pledge guarantees against 16 financial institutions or companies, and successively defrauded Hengfeng Bank Yantai Huanshan Road Branch and others of a total of 25.345 billion yuan in finance, including 24.755 billion yuan in loans from financial institutions.

The Paper counted 15 financial institutions that were defrauded:

The above-mentioned relevant person told the surging news, "Wuhan Jinhuang fraud is the most Hengfeng Bank, originally Hengfeng Bank granted 8 billion yuan to Wuhan Jinhuang, and finally lent more than 6.5 billion yuan, which also gave a person in charge of the bank 30 million yuan, but Hengfeng Bank also withdrew relatively early, and began to collect after the new leader came up."

According to the trial information, from 2016 to 2017, Zhang Shuyun, vice president of the Yantai Huanshan Road Branch of Hengfeng Bank (suspected of accepting bribes by non-state employees and detained on January 17, 2021), took advantage of his position to help Wuhan Jinhuang obtain a loan of 6.96 billion yuan (all guaranteed by fake gold pledges). At the beginning of 2016, Zhang Shuyun asked Jia Zhihong for 30 million yuan in the name of stock speculation, and after Jia Zhihong was arrested, Zhang Shuyun returned 30 million yuan to Jia Zhihong in November 2020. Zhang Shuyun was prosecuted in the case for accepting bribes.

Also indicted for accepting bribes is Hu Zhijun, business director of Northern Trust's Shanghai business department (detained on April 20, 2021 on suspicion of accepting bribes from non-state functionaries and illegally issuing loans), who was charged with accepting bribes of 6 million yuan.

Previously reported

He defrauded 20 billion yuan with 80 tons of "gold-clad copper" fake gold, and the first-instance verdict of the case was announced: life imprisonment

The biggest fake gold case in history! 83 tons of gold-clad copper, defrauded 20 billion ......

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