Bullion Street | July 22 2012 | Thanks, Minty

More than 5,000 investors were tricked into trade in illegal gold futures based in London, which is illegal on the Chinese mainland.

BEIJING (BullionStreet):Chinese authorities arrested a gang involved in illegal gold-futures trading worth at least $60 billion in the central province of Henan.

According to Guo Congbin, director of Luoyang public security bureau, the suspects, who had been trading since October 2008, had never registered with industrial and commercial authorities, as required by the law.

More than 5,000 investors were tricked into believe that they promoted investments in Loco London gold, the London gold market in Hong Kong, Guo said, which is illegal on the mainland.

The suspects claimed to be agents of overseas companies dealing in London gold and, with promises of huge returns, persuaded investors to establish accounts on the Internet for trading Loco London gold.

They did not inform investors of the risks of transactions or sign detailed contracts with them, and they charged exorbitant consulting fees for the deals.

The police found large amounts of money from the trading in bank accounts the suspects opened in Shanghai’s Pudong New Area, the statement said.

Although the suspects tried to escape detection, the statement said, using mobile phone numbers registered in Shenzhen, Guangdong province, and communicating with their agents through online messaging services registered in Hong Kong, police learned they were staying in an apartment in Pudong.

Several of the suspects were caught on March 2, when police raided the apartment, the statement said, and some others were later detained in Luoyang and Shanghai.

Zhang Hui, head of the Luoyang public security bureau’s economic investigation team handling the case, said that the investigation continues and more arrests will be made across China.