Another Biao Hui Collapses, With Losses Exceeding $20M

Miss Zeng, the organizer of the biao hui (Photo provided by a biao hui member via World Journal)

Another biao hui [Editor’s note: a loan club popular in the Chinese community] collapsed and more than $20 million from lenders evaporated. Victims say the head of the biao hui, who is known as Miss Zeng, had been organizing such huis, or clubs, for more than a decade and had been simultaneously running at least 10 huis with 78 members each. That makes hers the largest biao hui in the Chinese community. No one knows Miss Zeng’s whereabouts now. But she said via phone on May 29 that she is trying to sell her house in order to return the money to the lenders.

A few victims went to Asian American Communities Empowerment (formerly Brooklyn Asian Communities Empowerment) to seek help on May 29. They said they each lost tens of thousands of dollars to a few million dollars. A victim whose last name is Lin said this is the biggest biao hui incident in the Chinese community in New York. Miss Zeng is a 51-year-old immigrant from Lianjiang County of Fuzhou City, China. She is a veteran in the field with more than 10 years of experience and has a good track record. So people trusted her. The trust helped her biao hui grow like a snow ball.

“She was running at least 10 huis and each had 78 members. So all together there were 780 members. Each of them invested $1,000 minimum to the pool. So every month she collected $780,000. She had been running these huis for three years. So by now the pool should have about $20 million,” said Lin. But Lin noted that the number of victims may be fewer than 780 because some members joined more than one hui.

Another victim, Ms. Jiang, said Miss Zeng’s biao hui often had bidding meetings at 18 Eldridge St. in Manhattan’s Chinatown. Signs of trouble had been emerging since September 2016 when, while the huis were still in operation, Miss Zeng started to put off members who asked to cash out. She would find all sorts of excuses to pay less that the full amount or not pay at all, and only issued an IOU to the members with a promise of paying them off in the future. She has been missing since March 28. Her phone number still rings, but she rarely picks up.

IOU receipts issued by Miss Zeng (Photo by Yiyi Huang via World Journal)

John Chan, president of Asian American Communities Empowerment, immediately dialed Miss Zeng’s number after he heard the complaints. Nobody answered. But Miss Zeng called back after a while. She said she didn’t deliberately defraud the huis. But in the past few years, some members took the money and disappeared without having paid in their full share.

Not being able to collect enough dues to fill the pool, the biao hui started crumbling. As the organizer, she tried to make up the money on her own by doing some business. But the business was not doing well. Now she is trying to sell her house. Once the transaction is finished, she’ll pay off the members. “I hope the members can give me some time. After I sell my house, I’ll clean up the mess,” she said.

Lantao Sun, an attorney at the Ross, Legan, Rosenberg, Zelen & Flaks law firm said that a biao hui is an illegal loan system. The rights of members are not fully protected by law. When there is a problem, it’s often hard to get the money back for the victims. In this particular case, the organizer of the biao hui signed many IOUs for the victims. These IOUs can be used as evidence for the agreement between the organizer and the members. But to get justice, they have to go through a time-consuming litigation process. And whether they are able to get their money back in the end also depends on the financial status of the organizer.

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