Yang Bin, the former second-richest man in China, has been sentenced to six years in a Singapore prison for operating a multi-million-dollar Ponzi scheme disguised as a crypto investment operation.
The 61-year-old Chinese-Dutch national, pleaded guilty to eight charges that ranged from conspiring to engaged in a fraudulent scheme, operating without a valid work permit, and was fined S$16,000 on Aug. 26.
According to local media reports, Yang’s fraudulent activity, operating under the name A&A Blockchain Innovation, attracted more than 700 investors that lost some S$1.1 million out of a supposed S$6.7 million invested between May 2021 and February 2022.
The company purported to own 300,000 cryptocurrency mining machines that would afford investors daily returns of 0.5%. However, no such machines actually existed. Instead Yang used the money from new investors to pay returns to earlier investors, a hallmark of a Ponzi scheme.
A History Of Fraud
This is not the first instance of legal hassles that Yang has been facing. He was sentenced to 18 years in prison by a Chinese court in 2003 for tax evasion and underwent part of his sentence before being released in 2016.
His troubles first began in 2002 when he was appointed by North Korea to supervise economic development in the Sinŭiju Special Administrative Region; a short time later, Chinese authorities placed him under house arrest on charges of tax evasion.
Sophisticated Crypto Scheme With Bogus Returns
Yang’s latest scam is an app that depicted fake returns to investors in which the system was centralized, allowing for random figures input by the system manager to show fake returns of real money.
It was said by deputy public prosecutor Wong Shiau Yin that Yang had a major role in the operation and did not make any restitution for the victims. It was also stated that the enforcement authorities had recovered S$100,000 from Yang’s residence, and he had admitted that the money belonged to the investors.
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Locked Up
District Judge Brenda Chua sent Yang to jail for six years, taking into account he was higher in culpability compared to his co-accused, whose legal proceedings are ongoing.
Meanwhile, Yang’s lawyer, Teo Choo Kee, managed to lower his sentence a tad by putting across his point to the court that his client was due for a slightly less punishment on the account of his early guilty plea and cooperation with the police.
While talking about the monetary terms, the judge said that the sums involved were substantial and the victim’s grievances were years long, and no restitution has been made to date.
Yang’s punishment became the loud warning for all who had put their money into unregulated and fraudulent schemes with cryptocurrencies. This has also been a lesson to investors that, with the industry’s progressing and growing pace, they need to take special care and be extremely cautious before investing any kind of fund these days.
Featured image from Kohn, Kohn & Colapinto, chart from TradingView