Fraudulent company cheats 10,000 victims of NT$1 billion

TAIPEI, Taiwan, The China Post Staff

The Criminal Investigation Bureau (CIB) on Wednesday arrested two of the three owners of a fraudulent company which had cheated some NT$1 billion out of nearly 10,000 people. The company boasted several high-profile backers, including Democratic Progressive Party (DPP) stalwart Hsu Pi-lung, the father of a famous singer Hsu Chin-chun. Hsu, a former National Assembly representative, reportedly served as the head of the company three years ago. According to the police, operators of the fraudulent company Yang Kuen-hui, Yang Kuen-fou and Yangz Kuen-fa were previously convicted of defrauding several billions of dollars in a case in 1999. The trio, dubbed “Kinmen three brothers” by the media, were released on bail two months after they were nabbed. They returned to the old trade by setting up a new “Internet technology” company under the name of four employees. The company claimed to the Ministry of Economic Affairs to have NT$550 million in capital but in fact it is a ghost company. They attracted investors with lucrative stock deals and their business was so prosperous that another seven similar fraudulent firms were soon established to lure in more investments. The company used classified wanted ads to recruit new graduates or retired people seeking second careers. The Yangs “encouraged” their inexperienced and gullible employees to purchase stocks from phony high-tech companies before they went public. It was reported that a retired teacher was cheated out of NT$6 million, and most of the victims lost hundreds of thousands of dollars to non-existent stock deals.

About 19 victims reported the company to the CIB, which prompted its crackdown on Wednesday. However, the eldest of the Yang brothers, Yang Kuen-fou, fled to Shanghai in March. Beside the two Yang brothers, the police nabbed five accomplices and confiscated piles of stocks and booking records. The suspects will be charged with fraud, embezzlement and violating securities laws. The Yangs reportedly own two mansions near Taipei’s National Palace Museum with a combined market value of nearly NT$100 million. The houses, occupied by relatives of the brothers, are lavishly decorated with the money conned out of innocent investors, local media reported. DPP stalwart Hsu, the company president, reportedly will be questioned by the police soon in what is believed to be a low-key investigation due to Hsu’s special status.