Non-existent bank adds to long list of Chinese fakery

In a China awash with fake iPhones, pirated DVDs and knock-off Louis Vuitton bags, rice trader Lin Chunping has taken fakery to a whole new level: He invented a US bank and claimed he bought it.

The little-known businessman shot to fame in January when state media reported 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 (€47.5m) 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 is 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 recent days, 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 city of Kunming. The stores were modelled after the US company’s 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 $4,800 over four years to attend classes.

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 organiser had disappeared, the newspaper reported. Lin told Chinese reporters it took him two years to negotiate the purchase of the US 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 a US bank signalled Chinese triumph and US decline.

Lin said he renamed the bank USA New HSBC Federation Consortium and that the institution had already attracted $40m in deposits with the prospect of turning an annual profit of $5m to $6m.

The story attracted so much attention that Chinese journalists familiar with US 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, Lin told reporters he had made “exaggerations”.

A statement on the Wenzhou police bureau’s website said he is suspected of having falsified invoices worth tens of millions of euro through several of his companies in a tax-evading scheme.