Beijing police have arrested four suspects in a loan scam in which a car dealer and accomplices cheated a local bank out of 80 million yuan (US$9.7 million), the Economic Crime Investigation Division of the Beijing Municipal Public Security Bureau announced at the weekend.

The general manager, surnamed Chen, of Beijing's Zhongzheng Chuangwei Automobile Trading Company, is accused of falsifying car loan applications using more than 400 bogus applicants between March 2003 and January 2004.

Also implicated is the former director of the bank's Automobile Finance Service Center, surnamed Li, who is accused of accepting huge bribes from Chen to assist in the swindle.

After resigning his post at the bank, Li became deputy manager of Zhongzheng Chuangwei. His new career ended with his arrest.

The bank, which was not identified by police, granted credit totaling 180 million yuan (US$21.8 million) to 557 car buyers between March and December of 2003.

But investigation revealed that only 200 of the applicants were genuine. Loans of more than 80 million yuan (US$9.7 million) cannot be recovered, according to the police. Chen is believed to have taken a total of 10 million yuan (US$1.2 million) of the total amount.

One of the biggest bogus deals allegedly took place in April 2003, involving Chen and the Beijing-based Caixiong Gongmao Company.

With false loan applications from the company, Chen obtained 20 million yuan (US$2.4 million) from the bank, 18 million yuan (US$2 million) of which was transferred to the company, with the remainder going into his pocket. Two senior employees of Caixiong Gongmao, surnamed Shi and Guo, have also been arrested.

(China Daily January 10, 2005)