Chinese fraud mastermind jailed in UK for laundering bitcoin

Audio By Carbonatix

By Sam Tobin

LONDON (Reuters) -The mastermind of a vast Ponzi scheme in China, which conned nearly 130,000 investors, was jailed in Britain on Tuesday for over 11 years for laundering the proceeds of the fraud into cryptocurrency now worth billions of dollars.

Qian Zhimin pleaded guilty to two money laundering charges in September, after an investigation during which British police seized more than 61,000 bitcoin – currently worth over $6 billion – in one of the largest ever cryptocurrency seizures.

Qian wept in the dock as Judge Sally-Ann Hales sentenced her to 11 years and eight months, saying: “You were the architect of this offending from its inception to its conclusion … your motive was one of pure greed.”

Prosecutors said Qian and her co-conspirators spent more than 95 million renminbi ($13.34 million) on jewelry from the proceeds of the fraud.

While the criminal proceedings have finished, there remains a looming legal battle over the fate of the seized bitcoin and how the victims of the fraud are repaid, with British prosecutors mulling a compensation scheme for victims.

Qian’s lawyers say she never intended to defraud anyone and that the “astronomic rise in the value of bitcoin means it will greatly exceed the amount needed to compensate victims”.

MASSIVE INVESTMENT FRAUD IN CHINA

Qian, 47, changed her pleas on what was due to be the first day of her trial, admitting possessing and transferring criminal property. She previously claimed she was the target of a Chinese government “crackdown on successful crypto entrepreneurs”.

Prosecutors say Qian ran an investment fraud through her Lantian Gerui company between 2014 and 2017, into which around 128,000 people invested roughly 40 billion renminbi ($5.62 billion), about 6 billion of which was siphoned off. More than 80 people were convicted in China.

Qian fled China via Myanmar, Thailand, Laos and Malaysia, before she flew to London on a St Kitts and Nevis passport and began trying to convert bitcoin bought with the proceeds of the fraud into cash, prosecutors said.

Some of the victims lost their life savings, homes or marriages, prosecutor Gillian Jones said on Monday. Chinese police attended a Lantian Gerui event in July 2017 to arrest Qian but she “managed to avoid being apprehended”, Jones said.

Her helper Wen Jian – who was jailed last year for money laundering – sought to convert bitcoin into cash, including through the purchase of luxury goods on multiple visits to European countries which did not extradite to China.

QIAN AT LARGE IN BRITAIN FOR OVER SIX YEARS

British police first encountered Qian in 2018, when they searched an address in London where she was living with Wen after the pair tried to buy a north London property.

Police seized devices containing around 61,000 bitcoin, but did not access them until 2021 when it was worth about 1.5 billion pounds ($2.01 billion).

Wen was arrested in 2021 and charged in 2022, standing trial in 2023 but a jury could not reach verdicts. She was re-tried and convicted of one charge in 2024.

Prosecutors said that, as Wen was being re-tried, some bitcoin were moved from a wallet linked to Qian to an account set up by Ling Seng Hok, who replaced Wen as Qian’s helper. He pleaded guilty to entering into a money laundering arrangement.

This movement of bitcoin helped police track down Qian to an address in York, northern England, where she was arrested in April 2024.

Ling was also sentenced on Tuesday to nearly five years.

($1 = 7.1230 Chinese yuan renminbi)

($1 = 0.7451 pounds)

($1 = 7.1230 Chinese yuan renminbi)

(Reporting by Sam Tobin; editing by Sarah Young and Sharo Singleton)