The district court in Kaohsiung, Taiwan’s third largest city, on August 27th, 2020 sentenced Chou Jui-ching, chairman and in 2014 founder of Yi Yuan Fu Group, to 17 years in prison for defrauding local investors of 4.5 billion New Taiwan dollars (152.43 million US dollars).
Ultimately, Chou was ordered to pay a fine of 900 million New Taiwan dollars (30 million US dollars) and pay back 4.1 billion New Taiwan dollars (around 150 million US dollars) in illegal profits.
Almost two years on the run, he was finally arrested on September 24th, 2018, while visiting his girlfriend. After Chou managed to escape from the police once through a back window, he had been placed on the nation’s most-wanted list.
Chou, the self-proclaimed “Warren Buffett of Taiwan”, and 10 other suspects from his company were first indicted in April 2017 of breaches of the Banking Act, along with fraud, document forgery and money laundering.
On August 15th, 2019, the rest of the defendants received prison terms between two and 11 years. The trail again Chou began shortly afterwards, on September 5th.
Assets consisting of more than 200 real estate properties, over 400 bank accounts, NT$50 million in cash and three luxury sedan cars, had previously been frozen.
As many of Chou’s victims lost their life savings, 294 of them founded a self-help association to demand the return of inputs. They plan to appeal this first ruling, because in their opinion the convict has shown no remorse and therefore deserves a heavier sentence.
The criminals managed to fool so many people because they dressed like wealthy executives and distributed glossy corporate brochures. The group supposedly had multiple real estate holdings, including holiday resorts, as well as profitable investments in food manufacturing, textile production, green energy as well as other industries, and were pretending to list on the local stock market.
Most of the more than 20 subsidiaries Chou had registered were in fact shell companies used to launder money transfers and conduct “investment seminars” to tout his profit-making schemes: stock collateral loans, sale of e-commerce goods, peer-to-peer lending programs and regular deposits with a promised return of 20,000 New Taiwan dollars, or 2 to 4 % per month.
However, the investments were all Ponzi schemes, similar to pyramid schemes in that both are based on using new investors’ funds to pay the earlier backers. At the end, the mostly older investors were left with nothing.