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China Arrests Hundreds in Nation's Biggest-Ever Bank Fraud Probe

  • Authorities compensating losses of up to 500,000 yuan for now
  • Bank scammers alleged to have lured in 40 billion yuan

China arrested hundreds of people allegedly involved in the nation’s largest ever bank fraud and started repaying more victims of the $5.8 billion scandal, in a bid to maintain social stability ahead of this year’s twice-a-decade Communist Party congress. 

Police in Xuchang city of Henan province arrested 234 suspects tied to the scam and made “significant progress” in recovering the stolen money, according to a statement late Monday. Police have said that a criminal gang led by suspect Lv Yi illegally controlled four rural lenders including Yuzhou Xinminsheng Village Bank, offering rates as high as 18% to attract funds that officials say amounted to 40 billion yuan ($5.8 billion).