In a shocking revelation, Xie Wei, a former customer manager at the Guangda Bank branch on Weier Road in Zhengzhou, China, has been found guilty of fabricating financial products for 31 clients over a period of 13 years, defrauding them of more than 160 million yuan (RMB). What’s even more alarming is that over 60 million yuan was squandered on live streaming platforms. As a result, Xie Wei has been sentenced to life imprisonment. The case, which recently came to light, has sparked widespread public attention.
According to reports from various media outlets including the Xinjing News and Daily Economic News on July 2nd, the civil compensation lawsuits and criminal asset recovery objections stemming from Xie Wei’s case are still ongoing. Victims have taken legal action against the higher-level branch where Xie Wei worked, holding them responsible for compensation. Additionally, the live streaming platform involved has raised objections to the court’s decision regarding the criminal asset recovery, questioning its legitimacy.
With the branch involved in the case already deregistered in April 2022, victims are facing the dilemma of being unable to hold anyone accountable.
Xie Wei’s fraudulent activities began in 2009 and continued until 2022 when the scheme was uncovered. Over the 13-year period, she used the bait of “guaranteed high interest rates” to forge financial agreements and stamp them with counterfeit bank seals to gain the trust of clients. What is even more puzzling is that she managed to conduct these fraudulent activities within the bank’s premises, using office computers, with even the deputy branch manager endorsing her and referring clients to her.
It wasn’t until April 2022 when a client reported non-payment upon the maturity of a financial product, leading the police to discover a large number of forged seals and fake agreements at Xie Wei’s residence, hence exposing the massive fraud scheme.
By the time of the crime coming to light, the 31 victims had collectively been defrauded of over 160 million yuan, with over 90 million yuan remaining unrecovered. Many elderly clients have suffered the loss of their savings as a result.
In October 2023, the Zhengzhou Intermediate People’s Court handed down a life sentence to Xie Wei for fraud, confiscating all her assets and depriving her of political rights for life.
The fact that the Guangda Bank branch on Weier Road in Zhengzhou remained oblivious to such a large-scale and long-term fraudulent scheme reflects serious deficiencies in its internal controls and risk management, raising significant doubts about bank supervision from the public.
Out of the over 90 million yuan that Xie Wei spent extravagantly after the fraud, besides purchasing properties, vehicles, and luxury goods, more than 60 million yuan was spent on live streaming platform donations. The court revealed that she recharged around 59.51 million yuan on the Yinkoo live streaming platform and approximately 1.71 million yuan on other platforms, making a total of 324,400 donations over six years involving as many as 2,797 broadcasters.
Insiders have disclosed to Chinese media that Xie Wei had a particular penchant for donating to male broadcasters, even going as far as having a talent show host perform continuously for 8 hours. The court ruled that these donation activities did not fall within the realm of reasonable consumption, ordering the Yinkoo platform to refund 18.87 million yuan in profits and requiring 27 broadcasters who received more than 20,000 yuan in donations to take responsibility for returning the money.
The operating company of the Yinkoo platform, Beijing Milewu Network Technology Co., subsequently raised objections to the asset recovery, claiming their actions complied with the legal principle of “good faith acquisition” and should not be held accountable for retrieval. However, the objection was dismissed by the Zhengzhou Intermediate People’s Court, and the appeals process is currently ongoing at the High People’s Court of Henan Province.
Regarding the asset retrieval issue, Xie Wangyuan, a professor at the China University of Political Science and Law, believes that live streaming donations essentially constitute consumption. If the platform and broadcasters were unaware of the illegality of the funds, it should be regarded as acquired in good faith. On the other hand, Judge Li Xinlei from the Henan High People’s Court pointed out that if the platform failed to fulfill necessary inspection obligations, they should bear the corresponding responsibility for asset recovery.
Faced with substantial losses, the victims believe that the Guangda Bank branch in Zhengzhou failed in its supervision and should bear responsibility for the losses. Mr. Zhu and his wife have incurred losses amounting to 8.55 million yuan, leading them to file a lawsuit against the bank for compensation, but they were unsuccessful in both the first and second instance trials.
A glimmer of hope emerged in May of this year when the Zhengzhou Procuratorate issued a recommendation for a retrial, explicitly stating that the Guangda Bank branch in Zhengzhou had failed to detect Xie Wei’s criminal activities over the 13-year period, indicating significant regulatory loopholes and the need to assume supplementary compensation responsibility.
To date, some victims are still pursuing legal action against Guangda Bank through civil litigation channels.
It is noteworthy that similar cases within the Guangda Bank system are not isolated incidents. According to the China Judgment Document Network, the Guangda Bank Dongfeng Branch in Guangzhou had previously experienced a case where a customer manager defrauded over 50 million yuan, leading the court to ultimately hold the bank liable for compensation.
Analyses by mainland media suggest that as a professional financial institution, the Guangda Bank branch in Zhengzhou failed to timely detect Xie Wei’s 13-year-long fraud, with its regulatory loopholes being a significant factor in causing losses to the victims. The Xie Wei case has raised serious doubts in the public about the bank’s internal management and risk control capabilities.
Public records show that the Guangda Bank of China is affiliated with the Guangda Group and became the first nationwide joint-stock commercial bank with state ownership and international financial organization participation in 1997. The Guangda Group was established by the Ministry of Finance of the Communist Party of China and the China Investment Corporation, serving as a large state-owned comprehensive financial holding group, with its parent company being the China Investment Corporation.