(Yicai Global) April 23 -- A court in Beijing has sentenced a man to seven years in prison for defrauding more than 1,300 elderly residents of the capital city.

The Beijing Chaoyang District court also ordered Lu Hang, the principal accused, to refund and compensate his victims. Six others were given jail terms ranging from one to seven years, with penalties amounting to between CNY20,000 (USD2,977) and CNY500,000.

Lu conned senior citizens into invest their savings in his Beijing-based company, which claimed to run elderly care homes, through false advertising about high returns and no risk. Between 2015 and 2016, the firm had funds of more than CNY400 million (USD60 million), but things eventually went wrong, saddling investors and their families with huge losses, Yicai Global reported previously.

The major fraud case took two years. The court ruled that Lu's firm raised public funds, but did not have a financial license. So Lu and the six employees in charge of sales, operations, channels, finance and administration illegally took huge amounts of public money.

Many elderly people are unaware of financial risks and relevant laws and policies, so it is easy to deceive them with false advertising, Zhou Hongwei, a lawyer at Beijing-based Jingsh Law Firm, told Yicai Global. He suggested they educate themselves in the law and don't seek gains that go beyond what can normally be expected from investments.

About CNY44 million raised from the sale of Lu's company's equity and assets will go toward the damages. Land the firm owns in Jiangsu and Hainan provinces has been frozen and can be also used to indemnify the victims, the court ruled.