Metropolitan Police
Qian Zhimin’s elaborate scheme involved creating a shell company, promising investors would get rich from cryptocurrencies. In fact, the only one who got rich was her.
A Chinese woman, who was accused of having bought cryptocurrencies worth billions of dollars using resources diverted mainly from Chinese pensioners, is expected to receive her court sentence in the United Kingdom this week.
The case is linked to one of the largest single seizures of cryptocurrencies in the world.
More than 100 thousand Chinese they invested in Qian Zhimin’s company, which claimed to develop high-tech health products and mine cryptocurrencies. In practice, the money was embezzled, according to British authorities.
Pending the ruling, investors said they expect to hear back from UK authorities at least part of the money invested and diverted. Unclaimed money is normally transferred to the British government, which has raised speculation that the Treasury may benefit from the seizure.
“If we can gather all the evidence, we hope that the British government, the Crown Prosecution Service and the High Court will show compassion,” said one of the victims, identified as Yu, who claims to have lost his marriage after the fraud.
Qian Zhimin, 47, arrived in the UK with fake passport in September 2017, after Chinese police launched an investigation.
He moved to a mansion on the outskirts of Hampstead Heath, in north London, paying more than 17 thousand pounds per month of income. To pay for the property, he needed to convert part of his cryptocurrencies into cash.
He pretended to be a rich heiress of antiques and diamonds and hired a former restaurant employee as a personal assistant, who asked her to convert her cryptocurrencies into other assets, such as money and real estate.
With Bitcoin’s value soaring, Qian would be able to deliver on what his company had promised investors: that they could “get rich without getting out of bed.”.
At her trial last year, which ended with a six-year prison sentence for money laundering, assistant Wen Jian said Qian spent most of her days lying in bed, playing video games and shopping via the internet.
But Qian also worked out a ambitious six-year plan for new scams, according to his diary. The notes describe the intention to found an international bank, buy a castle in Sweden and even win the friendship of a British duke.
Qian’s stated goal was to become queen of , an unrecognized microstate on the border between Croatia and Serbia, by 2022.
Meanwhile, he asked his assistant to look for houses to buy in London. But the attempt to acquire a large property in Totteridge Common, an area known for its large, detached homes, prompted police to launch an investigation, after Jian unable to explain the origin of fortune from the boss.
Police raided Qian’s Hampstead home and found hard drives and computers loaded with tens of thousands of Bitcoinsa seizure considered the largest ever made in the United Kingdom and one of the largest in the world.
Qian had created the company through which he embezzled the money just four years earlier, in his home country of China. Lantian Gerui, or Bluesky Greet in English, claimed to use investors’ money to mine, or generate, new Bitcoins and invest in a series of innovative technological devices.
But, according to British police, it was an elaborate fraud. Qian’s company used promises of high profits just to attract more and more investors to the scheme.
“As we gathered more information about her involvement, that she was in fact the leader of the fraud, and not just a lower-level member, it became clear that she is very intelligent, persuasive and manipulative, able to convince a lot of people“, Detective Joe Ryan, from the Metropolitan Police, told the BBC.
Investors received daily bonuses each time they managed to attract new participants. This helped the coup to reach around 120 thousand peoplein all provinces of China, according to court documents from the company’s official prosecutors in the country.
According to the UK Public Prosecutor’s Office, the deposits amounted to more than 40 billion yuan (4.8 billion euros).
A former company employee later testified that the money used to pay daily earnings came from new investors, not cryptocurrency mining profits.
A Lantian Gerui exploited the isolation of many Chinese middle-aged and elderly. Qian wrote poems about social responsibility, with lines like: “We must love the elderly with the enchantment of a first love.”
The company also organized collective trips and banquets for current and potential investors, used to publicize new investment opportunities, with slide presentations and card machines available.
The company even held an event in the Great Hall of the People, a Chinese legislative building, according to an investor who participated and two other people interviewed by the report.
Despite running a highly visible business, Qian was known for her extreme secrecy. He only used the nicknames Huahua or Pequena Flor and communicated with clients mainly through the poems he published on his blog.
But he appeared personally to the biggest investors — those who invested at least 6 million yuan (around 770 thousand euros), inviting them to more restricted eventsaccording to one of these customers, named Li.
“Whoever was there can say they were amazed”, he recalls. “We all saw her as our Goddess of Fortune. She started encouraging us to dream big… she said that, in three years, it would give us enough wealth to support our families for three generations.”
Li, his wife and his brother together invested around 10 million yuan. The Chinese police investigation into Lantian Gerui, which began in mid-2017, marked the beginning of the end of Qian’s scheme.
“Payments suddenly stopped,” Yu recalled. “The company said the police were carrying out some checks… but they promised payments would be back soon.”
What helped investors remain calm, according to him, were the assurances given by managers that it was just a temporary interruption and that they should not seek out the authorities.
Mr Yu later discovered through court proceedings in China that Qian had bribed these managers to appease investors while he fled to the UK with the money.
Qian was not completely oblivious to the plight of her investors — in her diary, she wrote that she planned pay off debts in China when the price of Bitcoin reached 50 thousand pounds per unit. The notes, however, make it clear that his priority was to govern and develop Liberland, for which he set aside millions of pounds.
When she was finally arrested, in York, in the north of England, in April last year, the police found four other people in the houseSouthwark Crown Court reported at the beginning of the sentencing hearing, this Monday (10/11).
They had all been brought to the UK to work for Qian, in roles including purchasing, cleaning and security, and were employed illegally, the court heard.
At the time of his arrest, Qian denied all charges, claiming that he was just fleeing from a Chinese government crackdown on businesspeople of the cryptocurrency sector and disputing the evidence presented by the Chinese police. However, at her trial in September, she surprised by pleading guilty to illegally acquiring and possessing cryptocurrencies.
Since Qian’s arrival in the UK, the value of the cryptocurrencies he brought into the country multiplied more than 20 times. The fate of this money will be decided in a civil case about “proceeds of crime”, which should advance at the beginning of next year.
