level 2











The project 'Huaxi - International ecological town near the lake' cheated more than 1700 people for more than 277.1 million RMB. On March 23rd and 24th, specific news indicates that the suspects of deceiving people tricks were not at all clever, but the 'latent regulations' (regulations which aren't formal nor officially legal, though are continuously proceeding and becoming a norm) of the real-estate market became an attractive trap for people to be fooled by.

Accusations of prosecutor of Kunming city show that the business which presented these buildings to the public is an 'empty shell' business which defendant Yang Qingrong and other people utilized false capital to establish. They pretended to cooperate with Huaxi village and to had invested 6500 million RMB for carrying out the development of Yongsheng village. They prepared publication material and have then put up advertisements, finally succeeding in defrauding, gaining a huge sum of money.

In this process, a variety of information revealed by the project 'Huaxi - International ecological town near the lake' won confidence of hospitals, banks, universities and even a lawyers' office. If these groups hadn't all joined and purchased, the sum of money defrauded and the cheated group couldn't have been so large.

Suspect Shi Ruicheng has appeared in the past with a certain branch president of Huaxia Bank, introducing the related business. This man was definitely the second manager of headquarters of the Kunming branch of Huaxia bank, who was introduced many residential units and individual apartments for purchase. The propagated advertisements of that project appeared repeatedly in the local media.

How many 'latent regulations' are still in progress?

A variety of news revealed during the court hearing indicate the at present, the various kinds of 'latent regulations', operated by banking in the real-estate market give a chance for sham real-estate items.

One 'latent regulations': Starting development while the fund is not sufficient.

Second 'latent regulation': Putting false capital.

Third 'latent regulation': During the projects grouping and constructing for sale simultaneously.

To conclude, this illustrates that relevant department don't have power to supervise such problems and they neglect their duty.

[1] "华西•滨湖国际生态城" huá xī - bīn hú guójì shēngtài chéng - 'Huaxi - International ecological town near the lake', a name of a real-estate project, handled by a company in Kunming (Yunnan province), which has been proven to be a scam.

[2] 房地产 fángdìchǎn - Real estate.

[3] "潜规则" qián guīzé - 'Secret (or 'latent') regulations'; a term for certain operation conducts that although are not official legal, nor formal, have become a norm and almost a 'regulation'. The article above refers to negative norms which exist in China's real-estate market, making it an ideal domain for defraud conducts.

[4] 被告人bèigào rén - Defendant

[5] 空壳公司kōng ké gōngsī - 'Empty shell' business; a company which has no real substance and pretends to be engaging in certain projects.

[6] 律师事务 lǜshī shìwù - 'Lawyers affairs'

[7] 华夏银行 huáxià yínháng - Hua Xia Bank Co., Ltd; a bank operation throughout China, established in 1992.

[8] 庭审 tíngshěn - Court hearing