Woman, 39, sentenced to death for 640m fraud

A female executive of an investment company in Wenzhou, Zhejiang Province, was sentenced to death on Wednesday for fraudulently raising more than 640 million yuan ($104 million), making it the largest fraud case in the city's history.

The Wenzhou People's Intermediate Court handed down the death penalty to Lin Haiyan, 39, former executive director of Wenzhou Xinfu Investment Company, and ordered all her assets to be seized to compensate the creditors.

Lin started raising money to invest in commodities in 2007. She then covered her huge losses and continued raising money from new investors. Part of the new money was returned to early investors, while the remainder was put into the commodity and stock market.

Until the breakdown of the capital chain in 2011, she reportedly illegally raised 640 million yuan, a majority of which came from her friends and former coworkers. Only 428 million yuan was paid back.

The court said her behavior caused enormous economic losses and the money was not spent on production or operations but high-risk ventures. 

Lin's case is similar to a previous fraud case of the businesswoman Wu Ying, who was also sentenced to death in 2009 after cheating some 380 million yuan out of investors through private lending means.

Wu's case sparked heated public debate over whether the criminal law is too harsh on economic crimes. Wu was then given a two-year reprieve.

"There's a trend in the Chinese legal system that handing down harsh punishments to those who fundraise illegally could help curb such crimes in the future," Wang Weifu, a lawyer from the Beijing Zhizhou Law Firm, told the Global Times.