Jobless widow 240,000 yuan out of pocket in ant-breeding scam

Last July, 41-year-old widow and laid-off worker Zhang Liyun borrowed 240,000 yuan from relatives and friends to be a contract ant breeder for the Yilishen Tianxi Group, an aphrodisiac tonic maker based in Liaoning province. Ms Zhang was promised she would get the money back from Yilishen in four instalments within a year and would see a return of more than 30 per cent.

Ms Zhang is just one of more than a million people, mostly laid-off workers or farmers, who over the past eight years have signed such contracts with Yilishen, hoping to get rich quick or just make a living. They gave their life savings in exchange for boxes of ants that would supposedly be turned into health products. But their dreams were shattered in late November, when the group filed for bankruptcy.

Ms Zhang and other desperate ant farmers besieged the company's headquarters in Shenyang , and the provincial government offices, demanding compensation, but were told to wait until late March, after the company is liquidated.

Now, sitting in her two-bedroom apartment in an old, run-down residential building in Fushun, Ms Zhang flips through the heavy brochure trumpeting the glories of Yilishen, while grumbling: 'Why was I so stupid to believe what the group said? Why was I so stupid not to see it was a scam?'

There was nothing new or particularly sophisticated about the scam. Media reports said that from 2002 to 2004, Liaoning authorities stamped out 16 schemes that illegally raised funds by promising high returns to people who bought contractual bonds from the companies and planted trees, mushrooms, or raised rabbits or ants for them. But somehow ant breeders still did not relate Yilishen with a fraudulent scheme. They had their reasons.

Ms Zhang said the company had a reliable record of punctual payments and she thought raising ants for them was easy and safe. And all the publicity material served as strong endorsement of the company's credibility.