Source: Red Star News
On May 28, 2024, the Hebei Provincial People's Court announced the verdict on the "largest fake gold fraud case in history".
The main culprit actually used gold to cover copper and defrauded a huge amount of 20 billion from a financial institution!
Who is this "sacred" person who can use 80 tons of "gold and copper" to deceive more than a dozen financial institutions?
If it is overdue, a big incident will break out
The main culprit in this fake gold fraud case is named Jia Zhihong, who is the legal person of Wuhan Jinhuang Industrial Group. His crime was to use 83 tons of gold to clad copper and defraud more than 20 billion yuan from 15 financial institutions.
So, how did he do it? It all started with an announcement issued by Chang'an International Trust in 2019.
Chang'an International is mainly engaged in capital trust, financial leasing and other businesses, and is a well-known and veteran financial institution established in 1986.
It said in the announcement that because Wuhan Jinhuang failed to repay the 1 billion yuan loan on time, Chang'an Trust postponed the repayment until after June.
Since credit extensions are not uncommon, they generally do not cause market volatility and controversy.
But not long after the announcement of Chang'an Trust, it actually attracted the attention of 14 other financial institutions.
These institutions said that Wuhan Jinhuang had also handled an indefinite amount of loans with them, and they had no intention of repaying them.
Although these financial institutions were uneasy about Wuhan Jinhuang's ability to repay the loan, they were not too worried because Jinhuang had submitted 80 tons of gold as collateral when it took out the loan. If the golden phoenix is really unable to repay, they will take the gold away.
According to the gold price estimate in 2019, one gram of gold is about 290 yuan, and the total price of 83 tons of gold is 240.7 billion, which is much higher than the 20 billion that Jinhuang borrowed from 15 financial institutions.
In the eyes of the trust institution, Jinhuang will not be really so stupid and wait until 6 months later and not repay the loan. This time, however, they were wrong.
Six months have passed, and there has been no movement on Jinhuang's side, and the trust company at this time has also begun to suspect that the "gold" in its hands may be fake, otherwise it will not be able to explain why Jinhuang will not come to repay the ransom.
As a result, some trust institutions sent Jinhuang's gold for testing, and it was found that the gold was not pure gold, but gold-clad copper!
Gold-clad copper, as the name suggests, is a layer of gold plated on top of a copper block.
Fifteen financial institutions were deceived at the same time, which immediately caused panic in the financial markets. Government regulators were also aware of the incident and launched an investigation.
The reason for borrowing money began to cheat money
As government agencies stepped in, more and more details surfaced.
The actual controller of Wuhan Jinhuang is called Jia Zhihong, and the company he opened is mainly engaged in the business of buying and selling gold, silver and jewelry. In order to expand his business territory, Jia Zhihong thought of finding a trust institution to borrow money to expand the company's funds.
So, Jia Zhihong came to a financial institution and handled the corresponding loan business.
Generally speaking, before providing a loan, financial institutions will conduct relevant investigations on this person, such as looking at his credit information, the company's operating records, etc., to avoid losses due to the other party's inability to repay in the future.
Because the amount of money Jia Zhihong wanted to borrow was too large, the financial institution required him to provide collateral of corresponding value, such as houses, cars, gold, and so on.
At this time, Jia Zhihong told 15 financial institutions that he would take out 83 tons of gold as collateral. The financial institutions that heard this were very satisfied, such as the Minsheng Trust, which was deceived, and very readily agreed to provide Boss Jia with a loan of 4 billion.
At this time, financial institutions fell into the trap set by Jia Zhihong.
Although financial institutions are not stupid, they also know that before giving money to Jia Zhihong, they must first let the gold pass the inspection of the insurance company and deposit it in the bank's safe deposit box.
But what these institutions did not expect was that Jia Zhihong would be so bold and collude with insurance companies to defraud loans.
Through the court trial, it can be seen that Jia Zhihong asked the manager of the company's sales department to go to Shenzhen to buy high-quality gold-clad copper.
These fake gold cannot be detected with ordinary testing instruments. Unless you cut it open with a machine and look inside, you will know that it is a fake.
The manager of this sales department is not a good person, he actually embezzled more than 14 million money of Jin Huang privately when he bought gold and copper, and Jia Zhihong is simply a raccoon dog!
Let's go back to this case. After buying the fake gold, the manager handed it over to the manager of the Golden Phoenix Investment Department.
In order to turn the fake into the real thing, the investment department bought a lot of real gold on the Shanghai Gold Exchange, so as to obtain the real gold number and shape specifications provided by the Shanghai Stock Exchange.
Then, the director of Jinhuang and others smelted the fake gold and remolded it to make it look like real gold.
After all these things were done, Jia Zhihong began his fraud plan.
Deceived funds
Jia Zhihong knows that financial institutions will definitely require insurance institutions to conduct on-site quality inspection of gold. Therefore, he bribed the inspectors and general managers of the insurance company in advance. The general manager will help this because he is Jia Zhihong's brother-in-law.
According to Jia Zhihong's recollection, in addition to transferring the gold at the scene, they also forged the gold inspection report.
As a result, the insurance company told the financial institution that Jia Zhihong's 83 tons of gold were all genuine, and they had deposited it in the bank's vault.
After getting the commitment document issued by the insurance company and the quality inspection report provided, the 15 financial institutions quickly handed over 20 billion yuan to Jia Zhihong.
Later, it was only after Chang'an Credit issued an announcement that these financial institutions realized that they had been deceived.
When this gold scam was exposed, Jia Zhihong seemed to have evaporated from the world, and he also cancelled Jinhuang's business license.
The financial institution had no choice but to ask the insurance company for compensation, but it was refused. In 2020, the vice president of the insurance company said that it was an insurance case of fake gold and did not fall within the scope of their compensation.
When the financial institution heard the remarks, it was furious and took the insurance company to court.
After a detailed investigation of the case, the court ruled that the insurance company needed to pay 800 million in compensation.
The case has caused a lot of uproar, and of course Jia Zhihong will not escape the punishment of the law.
As the mastermind of the case, he was sentenced to life imprisonment after all his property was confiscated by the court. Of course, the employees of Jinhuang Company and the employees involved in the insurance company who participated in the case were also detained.
Although the villains have been punished by law, this incident has also exposed the obvious shortcomings of financial institutions in risk management.
Because Minsheng Trust also lent too much money to Jia Zhihong, it was unable to realize its own capital turnover, and in 2021, it could not be redeemed when it expired.
And Oceanwide Holding Group, which stands behind Minsheng Trust, also thundered and announced its delisting in 2023.
If they had been able to detect the problem during the quality inspection, the biggest fake gold fraud in history would not have happened, and the trust companies would not have experienced this heavy blow.
Resources:
Red Star News2024-05-28 18:22"Jinhuang Jewelry's 83-ton "Fake Gold Case" First Instance Verdict: Founder Jia Zhihong Was Sentenced to Life Imprisonment"