Chinese authorities have recently apprehended 21 individuals, including Ding Ning, the ringleader, for perpetrating a scam from an online financing scheme. They are charged with defrauding 900,000 people of approximately 50 billion Yuan or $7.6 billion.

The persons involved are connected with Ezubao, a peer-to-peer lender operating online. This group is considered by the Chinese state media as actually a Ponzi scheme and is probably the largest online financing business in the country.

According to China's official news agency, Xinhua, this 'lender' operated its financial scam by offering investors yearly returns from 9 to 14.6 percent on different projects. This return is excessively greater than what is currently being offered by wealth management products of most Chinese banks.

The group launched its scheme in July 2014 by Ding Ning, the chairman of Yucheng Group, a holding company. And by December, it has already amassed over 50 billion Yuan. The authorities have estimated that the group has victimized an estimated 900,000 people.

Caixin Group, a Chinese business magazine publisher, stated that Ezubao is the country's fourth biggest internet P2P lender.

The Xinhua news agency also reported that it fabricated over 95 percent of the projects it advertised on its website. The group also paid its debts with the money it receives from fresh investors, the report added.

Chinese authorities have been working at enacting measures to regulate the country's wealth management industry. With the country's expanding middle class, the potential for getting rich quick has attracted many people to these types of investment schemes.

This industry sector is worth $2.5 billion, according to Chinese officials.

A Ponzi scheme is similar to a pyramid system which is viewed by most financial analysts as a dishonest investment operation. It promises higher returns than normal on short term investments but actually uses money from new investors to pay the old ones. The name was taken from Charles Ponzi, who started this fraudulent system in the 1920s.