Suspects apprehended in Henan bank fraud

A large number of suspects involved in the financial scandal surrounding several rural banks in Henan province have been apprehended, 234 of them have been arrested and significant progress has been made in retrieving capital and recovering the losses, police in the city of Xuchang, Henan announced on Monday.

After further investigation by the public security bureau of Xuchang, it was found that the criminal gang led by the suspect Lyu Yi illegally controlled four rural banks, including Yuzhou Xinminsheng Village Bank, and the gang is suspected of carrying out a series of serious crimes.

The police said in addition to the normal deposit interest, the criminal gang used part of the illegally obtained funds to attract more funds with an annual rate of return of 13 to 18 percent as bait for an "interest subsidy" standard. The "interest subsidy" was exploited by the money brokers layer by layer, and was obtained by some large fund clients.

The investigation is proceeding in accordance with the law, the police said.

From April 18, four rural banks in Henan suspended their online services, leaving customers unable to access their funds, which quickly aroused outrage.

The financial scandal has sparked further public outcry over the past few months after some customers complained their health codes had turned red for alleged non-epidemic-related reasons. At the end of June five people, including four officials in Henan, had been punished for abusing their power by changing the color of the codes.

Previous investigation disclosed by police in Xuchang showed the group led by Lyu had allegedly been using several rural banks to engage in illegal activities and various crimes since 2011.

Cao Yin contributed to this story.