And now, an abc news investigation. We have learned of a wall street c scandal that could be bigger than the one contrived by bernie madoff. Ordinary americans, investors, losing billions of dollars,... See More
And now, an abc news investigation. We have learned of a wall street c scandal that could be bigger than the one contrived by bernie madoff. Ordinary americans, investors, losing billions of dollars, thinking they were riding the chinese economic boom, only to get a very big shock. Abc's chief investigative correspondent brian ross is on the case. Reporter: As one chinese company after another managed to get listed on nasdaq and the new york stock exchange, al smith and his wife in boise, idaho, saw it as a safe way to get in on china's huge economic boom. You think there's some kind of stamp of approval once they come on these exchanges. Reporter: But they wound up losing $60,000, when they invested in a chinese coal company traded on the new york stock exchange that, it turns out, had no coal mine. I'm not a big guy or a rich guy. Just -- was pretty tough for us. Reporter: U.S. Authorities say smith's money and that of many other americans ended up in the pockets of the coal company boss, a kind of chinese version of bernie madoff. All part of what an abc news investigation found is a wave of suspected fraud by some 70 chinese companies, once listed on u.S. Stock exchanges. Common theme among the many cases that we've already filed is the brazenness of the fraud. It's quite extraordinary in some instances. Reporter: Including what happened with a company called china integrated energy. Which claimed to operate three big fuel plants in china. But according to an investor's lawsuit, these surveillance photos taken at one plant supposedly open rating at maximum capacity show scant activity and no tanker trucks carrying the fuel to market. In four months, I found they produced essentially nothing. Reporter: There was a beehive of activity on one day, the day american investors came for a tour. It was the first time in four months we see tanker trucks show up. Reporter: But once the investors are gone, so are the tanker trucks. Just as dead as before. Reporter: So, this was a complete con job. Exactly. Reporter: The company denies any fraud, but later acknowledged there were problems at this factory. The exchanges say they have since imposed more stringent rules on such companies. But a nasdaq official became unhappy when we pressed to know how could so many of them get listed in the first place. Companies get on exchanges through -- through very -- look, this interview is over right now. It's over right now. Reporter: What do you mean? I'm walking you out the door. Reporter: Before she left her job as chair of the s.E.C., Mary schapiro told us that chinese officials refused our request to cooperate in going after the suspected frauds. Tonight, the chinese government told us that was a groundless accusation. So, no help from the chinese on this, diane. All right, on the trail again, brian ross. Thank you. And now, we want to bring
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