WHEN Ezubo was named “online credit financial brand of the year” by China’s National Business Daily in 2015, Jiang was comforted.

    The 60-year-old investor, who asked not to use her full name, had been reluctant at first to put money into the fast-growing, Anhui-based peer-to-peer (P2P) lender.

    “I had doubts at the beginning,” Jiang said. “[But] many of my friends and their families had invested in Ezubo. I saw the company’s advertisements and awards on Chinese media and other channels, so I thought it was real.”

    Instead, Ezubo was allegedly running the largest online fraud yet seen in China.

    Jiang, who invested 150,000 yuan (US$22,800) in Ezubo in mid-2015, just a year after the company launched, is one of more than 900,000 private investors apparently scammed by the company.

    Authorities have arrested 21 suspects linked to Ezubo and its parent company, Yucheng International Holdings Group, on charges of illegally collecting funds, having allegedly conned more than 50 billion yuan from investors, according to Xinhua.

    P2P sites, which bring lenders and borrowers together, play a big part of China’s US$2.6 billion-and-expanding wealth management industry.

    According to Xinhua, Ezubo attracted investors with promises of annual interest payments of 9 to 14.6 percent in return for funding leasing projects, but instead used the money paid in by new investors to pay off earlier ones, in what Xinhua described as a classic Ponzi scheme.

    Yong Lei, once the director of Ezubo’s risk control department and now detained, was quoted by Xinhua as saying that “95 percent of Ezubo’s investment projects were fake.”

    The company’s executives also spent large sums on personal luxuries and high-risk junk securities, Xinhua reported.

    Ding Ning, 34, founder of Ezubo, reportedly used investors’ money to buy lavish gifts for Zhang Min, the company’s president, including a residential property in Singapore worth 130 million yuan and a pink diamond ring worth 12 million yuan.

    In addition, Xinhua said Ding paid huge salaries to the company’s employees — the company paid 800 million yuan to employees in November 2015 alone — and insisted all secretarial staff wear designer outfits and expensive jewelry to burnish the company’s image of profitability.

    But tightening cash flow and unusual transactions by Ezubo triggered an investigation by Chinese authorities in December, Xinhua reported. (SD-Agencies)