A Chinese court, on Friday, ruled in a major fraud case involving more than 2.7 billion yuan ($391 million) in loans secured with fake gold, ordering the seizure of overseas assets from those involved.

The Weinan Intermediate People's Court in Shaanxi province ruled against suspects Zhang Qingmin and Zhang Shumin, ordering the confiscation of 17 properties they purchased in Cyprus in Europe, along with funds and related interest from seven bank accounts, to be returned to the defrauded entities.

According to a statement released by the court, between 2011 and 2016, Zhang Qingmin, along with others, used self-made counterfeit gold mixed with tungsten to obtain gold-backed loans from four financial institutions in Shaanxi and Henan provinces, and other areas, resulting in losses exceeding 2.7 billion yuan.

During the same period, Zhang Qingmin directed others to transfer the fraudulently obtained bank funds into accounts controlled by Zhang Shumin. To conceal and hide the proceeds from Zhang Qingmin's loan fraud, Zhang Shumin dispersed more than 1.4 billion yuan into accounts held by money launderers. The funds were later transferred to locations including Hong Kong, with part of the money moved to Cyprus, where the two used the funds to purchase real estate and make deposits, the statement said. In May 2016, the pair fled abroad.

The court said in the statement that there is evidence to prove Zhang Qingmin committed loan fraud and Zhang Shumin engaged in money laundering. Both have been on the run for more than a year since warrants were issued for their arrest and have not yet been apprehended.

The court also said the overseas properties and funds in the bank accounts sought for confiscation by Weinan prosecutors were illicit gains and other assets related to the case belonging to the two individuals. Except for portions that should be lawfully returned to the financial institutions, the remaining assets are to be confiscated, the statement said.

The court said it issued a public notice after accepting the case. During the six-month notice period, four financial institutions applied to join the litigation, seeking the return of their defrauded funds.

On March 20, the court publicly heard the case with nearly 30 attendees, including national lawmakers, political advisers and local residents. The litigation rights of all parties, including the suspects and interested parties, were fully safeguarded, the statement added.