January 16, 2009 8:40 AM
LETTER FROM ASIA: Is China's White-Collar Death Penalty Fair?
Posted by Anthony Lin
The enormous fraud perpetrated by Bernard Madoff has some U.S. commentators wondering if the biggest white-collar criminals deserve the same punishments as murderers, even the death penalty. China, where financial fraudsters routinely are executed, is frequently cited approvingly.
A report in leading Chinese business magazine Caijing details the plight of 44-year-old Du Yimin, a businesswoman sentenced to death in her native Zhejiang province for running a Ponzi scheme that cheated investors out of 700m yuan ($102 million).
The Chinese Ministry of Public Security has been stepping up such prosecutions. It says there are now 1,416 similar open cases involving 10bn yuan ($1.5 billion) in investors' money.
Caijing reporter Ye Doudou says there is concern that, in targeting activities like those of Du, who promised investors a 10 percent return, the government is actually striking out at an underground financial system that offers small entrepreneurs turned away by banks their only means of raising funds.
Indeed, Du, whose case is expected to be reviewed by the People's Supreme Court in Beijing following a recently rejected appeal by the Higher People's Court of Zhejiang Province, claims she was not perpetrating a fraud. Charged with using the money to buy apartments, cars, and luxury goods, Du says she borrowed the money to pay off debts after her business--a collection of real estate and mineral investments--hit a slump.
Though there are undoubtedly cases of fraud, Ye writes, "some underground financing projects are actually considered lifelines for [small and medium enterprises] that have been rejected by banks and are suffering financial strain."
Ye also notes that some legal scholars are concerned about the fairness of the death penalty in such cases when other economic crimes engender lower sentences. While those charged with fund-raising fraud risk the death penalty, those charged with illegally collecting money from private investors only face a ten-year maximum sentence.Make a comment