Details of the illegal fund-raising fraud of over 2.1 billion yuan (RMB) by He Moumei (female), former union president of ZTE Corporation, have been revealed recently. The case involved 4,000 to 5,000 employees, and He Moumei had taken 50 sleeping pills in a suicide attempt before turning herself in.
He, born in 1970, joined ZTE in 1997 and served as chairman of the company’s labor union since 2000. The union has two wholly owned subsidiaries, ZTE Yihe and Yihe Tiancheng, and He served as the legal representative and chairman of the board of directors of the two companies.
Recently, a verdict was published on the website of the Chinese Communist Party’s Judicial Documents. According to the investigation, from early 2015 to March 2017, He Moumei released fund-raising information through his WeChat public number, “He Fan Club”, YiXiu’s personal microblog, WeChat group, QQ group and other channels, and used high returns as bait in Yixing Tiancheng’s “Zhongxing E Home The company’s “Zhongxing E Home” e-commerce platform collected funds from many people in 26 installments.
Subsequently, He Moumei used a large number of private accounts to receive and transfer the fund-raising money, and used the collected funds to purchase high-risk trust financial products, buy real estate, buy and sell stocks in the secondary market, return the misappropriated company funds, repay personal debts, and embezzle and transfer them to overseas.
In the case of financial losses and transfer of funds resulting in difficulties in the return of funds raised, He Moumei fictitious financial performance to continue to raise funds, and new funds raised to return the principal and interest on the maturity of funds raised.
After investigation, He Moumei accumulated 2.119 billion yuan of funds, participating in 8,819 people, 25,580 people, the total amount of financial funds not returned to 3,921 people is 899 million yuan.
According to the Daily Economic News, the funded participants include not only ZTE Corporation employees, but also ZTE Corporation holding companies, participating companies, affiliated companies, external cooperation unit personnel, and external personnel.
Throughout the process, ZTE Corporation’s labor union officer Hu was instructed by He Moumei to receive statistical fundraising money, conduct transfer operations, buy and sell stocks, hold stocks and financial products on behalf of the company, answer questions from fundraising targets, and clear fundraising money.
Wang Moumei, deputy director of the trade service department of Yihe Tiancheng Company, was instructed by He Moumei to provide his personal bank account to receive the wealth management money, collect other people’s stock accounts and corresponding bank cards and Internet banking U shields for He Moumei’s use, and hold the wealth management funds and wealth management products on his behalf.
He Moumei confessed that from January 2015 to April 2017, he received a total of four to five thousand employees’ investment money of about 1.3 billion yuan, which has been returned 400 million yuan, and more than 900 million has not been returned to the employees.
On July 11, 2017, He Moumei and others were investigated for alleged misappropriation of funds; on August 9 of the same year, He Moumei was investigated for alleged capital raising fraud.
After the incident, He Moumei had attempted suicide. She was admitted to the hospital on July 11, 2017, where she claimed to have taken 50 tablets of clonidine (a sleeping pill). The following afternoon, He Moumei was taken away for investigation.
In April 2020, He Moumei was sentenced to 15 years for the crime of capital raising fraud; 7 years for the crime of misappropriation of funds; and 6 years for the crime of misappropriation of office. The combined punishment for several crimes was decided to execute a total of 20 years of imprisonment and confiscation of personal property of 20 million yuan.
In addition, Hu, Ji and Wang were sentenced to 6 years, 4 years and 4 years, respectively. After the sentencing, Hu and Wang appealed. The case was made final on January 20, 2021, and the original sentence was upheld.
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