Taiwan Biotech Firm Yintai Jihe Defrauds 8 Banks of Over $400 Million, Scams 995 Investors Out of $361 Million

On the 8th, the Taipei District Prosecutors Office formally indicted Lin Shih-Jung, the actual operator of Yintai Jihe United Biotech, and 10 other core members of a criminal group on multiple serious charges, including fraudulent securities trading under the Securities and Exchange Act, bank loan fraud under the Banking Act, violations of the Company Act, and fraud under the Criminal Code.

Prosecutors stated the total amount involved reached NT$814.04 million (approximately USD 26.5 million), primarily because Lin Shih-Jung and others, fully aware that the company was poorly operated and had no possibility of listing, allegedly carried out five false capital increases, inflated the registered capital, falsified financial statements, and submitted fake invoices to defraud over NT$400 million from eight financial institutions, including First Bank.

They also colluded with underground brokers to market the company as the 'leader in Taiwan's pandemic industry,' extracting funds from nearly 1,000 innocent investors and original shareholders.

The Taipei District Prosecutors Office pointed out that Lin Shih-Jung, as the responsible person of Yintai Jihe United Biotech, abused his position between March 2019 and October 2020—just one and a half years—to apply for as many as five false capital increase cases.

Through layered accounting manipulations, Lin deceived Taipei City Government officials, successfully obtained official approval, and inflated Yintai Jihe's original capital of NT$20 million to NT$122 million on paper.

After inflating the capital, Lin Shih-Jung immediately launched a bank asset-stripping scheme. From May 2019 to October 2021, he conspired with Yu Kun-Lin, the head of Aishiwei Company, forcing the company's accounting staff to beautify financial statement figures. They then submitted carefully forged financial reports to banks, attaching completely fictitious invoices from Aishiwei Company with no actual transactions, fabricating false lists of suppliers and sales revenue.

This elaborate fraud enabled them to obtain a massive total of NT$406,369,200 from eight well-known banks across Taiwan. First Bank suffered the largest loss, with NT$104,939,200 and USD 668,000 defrauded.

The losses suffered by the other seven banks are as follows (in NT$):

- E.Sun Commercial Bank: NT$69,680,000 - Taichung Commercial Bank: NT$36,000,000 - Hua Nan Bank: NT$35,000,000 - Land Bank of Taiwan: NT$32,000,000 - Chang Hwa Commercial Bank: NT$24,000,000 - Shanghai Commercial & Savings Bank: NT$12,000,000 - Yuanta Commercial Bank: NT$2,710,000

In addition to treating banks as ATMs, prosecutors discovered that during the global outbreak of the COVID-19 pandemic, Lin Shih-Jung, fully aware of the company's poor operations, saw the pandemic as a golden opportunity. He quickly collaborated with multiple underground financial crime groups, using underground investment advisory advertisements to market Yintai Jihe as Taiwan's 'leading pandemic industry company.'

Lin even falsely claimed the company was deeply collaborating with well-known domestic and international technology and biotech giants and would soon be listed on the stock exchange. Through underground brokers, salespeople used high-pressure phone marketing to sell worthless Yintai Jihe shares at high prices to the public. Prosecutors estimated that as many as 995 unspecified investors bought shares between April 2020 and July 2021, with total losses reaching NT$361,173,000.

Moreover, to secure more operating funds, Lin Shih-Jung and others targeted the company's long-time original shareholders, sending them false share subscription notices. Promotional materials falsely claimed, 'Yintai Jihe's affiliated company, Yalianbi Company, continues to manufacture for major brands like Mentholatum,' deceiving original shareholders into subscribing to new shares between July and August 2020, resulting in additional losses of NT$46,500,022.

The Taipei District Prosecutors Office emphasized that the 11 suspects have been referred for prosecution. Considering the heinous nature of Lin Shih-Jung's crimes and the severe damage to Taiwan's financial order, prosecutors simultaneously requested the court impose a 20-year prison sentence and confiscate all illicit gains amounting to over NT$814.04 million.