Chinese Businessman Makes Up a Fake U.S. Bank -- and 'Buys' It

Lin ChunpingBy DIDI TANG

BEIJING -- In a China awash with fake iPhones, pirated DVDs and knockoff Louis Vuitton bags, rice trader Lin Chunping took fakery to a whole new level: He invented a U.S. bank and claimed he bought it.

The little-known businessman shot to fame in January when state media reported that he had taken over Delaware-based Atlantic Bank. The unprecedented acquisition brought him praise: His hometown gave him a prestigious political appointment and state media called his business experience "legendary."

The only thing that may have been legendary is Lin's audacity. Not only did he not buy Atlantic Bank in Delaware for $60 million as he claimed, but there is no Atlantic Bank in that state.

Chinese reporters could not locate an Atlantic Bank or a bank registration by Lin in Delaware. He's under arrest for an unrelated fraud and has been forced to give up his municipal-level appointment to the Chinese People's Political Consultative Conference, the government's top advisory body.

Lin, who was arrested in early June, could not be reached for comment. But the 41-year-old's short, spectacular rise and fall shows how fakery has evolved in China, morphing from the manufacture of copycat goods to entire institutions and careers.

Last year, officials found five fake Apple stores in the southwestern city of Kunming. The stores were modeled after the U.S. company's iconic stores right down to the winding staircase and the staff in blue T-shirts.

In early June, local press in eastern Shandong province exposed a fake university. Students who did not score high enough on the national college entrance exam to make it into university received sham admission letters to the Shandong Institute of Light Industry, a real school. The students paid nearly 30,000 yuan ($4,800) over the course of four years to attend classes at the institute.

Weeks before graduation, the students learned they would not get diplomas because they were not officially enrolled at the school but in a private training program that rents space from the institute, according to the report in the state-run Jinan Times. The program organizer had disappeared, the newspaper reported.

Among students, getting ahead by padding resumes or other subterfuge is common.

Zinch China, the Chinese arm of U.S.-based educational networking site Zinch.com, estimates that 90% of recommendation letters to U.S. schools are fake, that 70% of the essays are written by someone else and that half the transcripts are fabricated. Zinch drew the numbers from interviews with Chinese students, parents and agents.


Experts point to many reasons for the widespread of lack of scruples, from the need to be hyper-competitive to succeed in an over-populated society to an ancient sage who countenanced lying to achieve a higher purpose.

He Huaihong, a Peking University philosophy professor who teaches ethics, takes aim at China's politics, specifically the disconnect between an avowedly communist leadership and the capitalist economy it oversees.

"Jargon left from a century of political revolution is so disconnected with reality that the society is filled with meaningless, empty talk," said He.

Lin told Chinese reporters that it took him two years to negotiate the purchase of the U.S. bank, and that the bank had declared bankruptcy in 2008 because of the financial crisis. To add more flair to the story, Lin told reporters that the bank had been running for 85 years and was run by Jews, who are stereotypically seen by many Chinese as having superior business skills.

Lin's story was particularly captivating because overseas acquisitions are a point of pride in China, showcasing its rising economic power. Lin's supposed purchase of an American bank signaled both Chinese triumph and U.S. decline.

His claims also cheered his hometown, the eastern city of Wenzhou, which was reeling from a government-imposed credit crunch that had ruined some highly leveraged entrepreneurs, some of whom fled the city and their debts. A few committed suicide.

"People were shocked that an obscure businessman bought a foreign bank and it was a U.S. bank nonetheless. He wasn't even a banker to begin with," said Zhu Xiaochuan, a researcher on China's financial law at CEIBS Lujiazui Institute of International Finance in Shanghai. "The news must be credible because it was in mainstream media. The public were amazed how wealthy Wenzhou businessmen were."

A profile on the website of the ruling Communist Party's newspaper People's Daily depicts Lin as sharp and hardworking, selling buttons as a teenager, then purchasing a copper and gold mine in Ghana and investing in the rice business in China. The profile is still available online.

Lin said he renamed the bank USA New HSBC Federation Consortium Inc. and that the institution had already attracted $40 million in deposits with the prospect of turning an annual profit of $5 million to $6 million. The new name had an air of respectability, borrowing from the London-based global banking giant HSBC Holdings, whose brand is well-known in China.

The story attracted so much attention that Chinese journalists familiar with U.S. banking regulations checked into the legitimacy of Lin's claims. They found no Atlantic Bank in Delaware and that Lin's New HSBC was not licensed to offer banking services in Delaware.

When his nonexistent bank was exposed in March, Lin told reporters he made "exaggerations" to raise his social status and to win future opportunities in banking.

Lin is not known to have made any money off his bank claims, but after they were shown to be false he apparently became a target in a police campaign to crack down on economic crimes.

A statement on the Wenzhou police bureau's website said he is suspected of having falsified invoices worth of hundreds of millions of yuan (tens of millions of dollars) through several of his companies in a tax-evading scheme.

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31 Comments

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jdykbpl45

Did he sell the Federal Reserve? Should have.

June 20 2012 at 4:37 PM Report abuse +2 rate up rate down Reply
Artie

What a world....

June 19 2012 at 11:31 AM Report abuse rate up rate down Reply
DRILLER

hahahahaha sounds like the scammers have moved from Chicago to beijing, one bussiness that needed to go too bad they cant take our scammer in chief with them

June 19 2012 at 5:06 AM Report abuse +2 rate up rate down Reply
1 reply to DRILLER's comment
cpo1514

Driller
Thought China got the Bamsters people... GE is there, Buffet, and Pelosi family investments.

June 21 2012 at 7:18 AM Report abuse +1 rate up rate down Reply
Pllc15

China better becareful about scalawags like Lin who will damage their reputation as an economic swindler as Nigeria is today. Any knowledgeable businessman won't touch a Nigerian letter of inquiry with a 100 ft pole. The same could happen to China, if they don't put the screws to fraudulent practices.

June 18 2012 at 11:02 PM Report abuse rate up rate down Reply
Andy

Sounds as if the new Robber Barons speak Chinese. Probably Mandarin.

June 18 2012 at 10:43 PM Report abuse +2 rate up rate down Reply
anthonygolfbones

If you really are interested about whats going on in China just search CHINA MOTORS and see what good old Goverment motors has done with all this bailout money along with all the money stolen from the retiree's during the bankruptsy.

June 18 2012 at 10:37 PM Report abuse +1 rate up rate down Reply
yabbiyum

Thank the Republicans for opening 'trade' to China, so we could sell out our manufacturing to them, and get fake stuff in return. Now they own us. There's your 'free trade', except we lost our shirts in the deal.

June 18 2012 at 9:06 PM Report abuse -2 rate up rate down Reply
2 replies to yabbiyum's comment
mark2win

yabbiyum, you are wrong. It was Clinton that opened the doors to Chinese goods coming to the US. He did that and they gave him campaign contributions, which he was forced to give back because that is illegal. So Clinton ruined our economy for contributions that he couldnt keep- he sure knows how to make a deal!!!

June 19 2012 at 7:03 AM Report abuse +1 rate up rate down Reply
cpo1514

yabba

Too bad Obama cannot control his borrowing addiction. China is willing to satisfy this Clowns addiction and all of the Libs that support this Occupant are enablers.

June 21 2012 at 7:20 AM Report abuse +1 rate up rate down Reply
lakasatganda

Did you ever wonder why the famous Great Wall in China ever existed? That wall was built to separate the bad and the good Chinese people, but now they are all mixed again. Life in China is really very, very tough, which forces many to do illegal things just to escape living below the unbearable poverty line. But, unfortunately, Chinese government is very reluctant in helping and equipping its own people, especially those who were really in distress, but exploiting them instead in order to gain more political power.

June 18 2012 at 8:57 PM Report abuse +2 rate up rate down Reply
wwchak

AIG, Lehman Brothers, Bank of America, don't we see it all here in the States?

June 18 2012 at 8:53 PM Report abuse +2 rate up rate down Reply
petepar1

Sounds alot like our bankers whats new ....

June 18 2012 at 8:27 PM Report abuse rate up rate down Reply