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Chinese father accused of fraud will return cash raised online to treat daughter’s cancer

A Chinese father who raised millions through an online appeal to help treat his sick daughter will return the money to the donors amid accusations of fraud.

In a statement late Thursday afternoon, Tencent, the operator of WeChat, the social media service through which the money was raised, said the father, Luo Er, would give back 2.526 million yuan (HK$2.844 million) raised online to cover his daughter’s medical expenses for leukaemia.

In addition, Liu Xiafeng, the owner of financial consulting firm Xiao Tong Ren, a company supporting the appeal, would return 101,110 yuan sent in by the public to his company’s WeChat account.

The decision to return the money was the result of discussions with Luo, Liu, the Shenzhen civil affairs bureau and Tencent, the statement said.

The transactions would be processed within three days, Tencent said.

Tencent’s statement came three hours after Luo and Liu said they would use the donations to set up a fund to help other children with the disease.

Luo and Liu said in their statement that the appeal attracted more attention than they had anticipated and they felt sorry for the negative social fallout.

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Luo, a writer and journalist from Shenzhen in Guangdong province, launched the appeal on his WeChat account on Friday, asking for help to cover his five-year-old child’s medical treatment, which cost at least 10,000 yuan a day.

His posts were shared quickly, especially after Luo said financial consultancy firm Xiao Tong Ren had agreed to donate one yuan each time the posts were shared on social media, with a cap of half a million yuan. Donations came pouring in and by Wednesday night, the post had been shared 548,432 times.

But mainland media and internet users soon accused him of fraud, saying the family were middle class and the girl’s medical costs had been exaggerated.

Internet users, including some of Luo’s former colleagues, friends and neighbours, claimed online that he owned three houses, a car and a profitable advertising agency.

They claimed the family had so far only paid 20,000 yuan to the hospital directly because the child was covered by health insurance.

Some also alleged that the fundraising campaign had been orchestrated by the consultancy firm for publicity, claiming Luo and Liu were close friends.

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Luo said he owned a home in Shenzhen and two others in Dongguan but did not have the paperwork for the Dongguan properties and so could not sell them, the Beijing Youth Daily reported on Wednesday.

He had a car, bought a decade ago, and he did not own any companies, he was quoted as saying.

The Shenzhen Children’s Hospital, where Luo’s daughter was treated, said on Wednesday that the girl’s medical costs since diagnosis amounted to 204,244 yuan. The family paid 36,193 yuan out of their own pocket, with the rest covered by the medical insurance, it said.

The hospital’s statement was also posted on the National Health and Family Planning Commission’s WeChat account.

The Shenzhen Civil Affairs Bureau said it was attaching high importance to looking into the matter and that an investigation team had been formed. It said was collecting information from various departments as part of an investigation into the incident, the Beijing Youth Daily reported.

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Professor Zhou Runan, an academic at Sun Yat-sen University’s philanthropy research institute, said people had the right to appeal for help from the community, but questioned the ethics of Luo’s actions.

“Many people think Luo lives a middle-class lifestyle and he should not ask for help from the public since there are many more who are poorer than him,” Zhou said.

“Luo, as a journalist with many acquaintances in the media industry, leveraged his media background and used his ability to tell a good story to amplify the circulation of his donation call.”

The incident would reduce the public’s appetite for philanthropy and giving, he said.

Lu Xuan, a lawyer and director of Shanghai Fuen NGO Law Service Centre, said Luo might have broken the law.

According to national legislation, people who intentionally receive other people’s money by covering up or fabricating facts are regarded as having committed fraud.

“If the amount of money Luo collected from the public reaches a certain level, his actions would constitute a crime,” Lu said, adding that the amount of money would be decided by the court.