In the early 2000s, the private fundraising frenzy reached its peak in Xiangxi area, Hunan province, attracting significant capital with tacit government approval. In 2008, the government reversed its stance, abruptly halting financing projects, causing panic and a rush to withdraw funds. Mass protests followed, and one incident involved self-immolation. More than 90 entrepreneurs were prosecuted, and 20 companies were sealed, leading to the "Xiangxi Illegal Fundraising Series Case." Zeng was one of those involved. He was detained in October 2008 for illegally absorbing public deposits, and his charges were later changed to fundraising fraud, an offence eligible for death penalty.
The first-instance court found that Zeng deceived the public with high-return promises to attract investments, even though many of his fundraising projects had passed government approval. By May 2011, the court confirmed Zeng’s illegal fundraising totaled 3.452 billion yuan, involving 24,238 participants and causing a loss of 620 million yuan. The court considered the amount exceptionally large and destabilising to society, and decided a death sentence. After his appeal was rejected, the Supreme People’s Court approved the death sentence in June 2013, and Zeng was executed on 12 July 2013.
The defence argued fair trial concerns, stating that Zeng’s company had the capacity to repay debts, but the government sold off the company’s assets at a low price before his prosecution. Both first-instance and appeal courts did not conduct an asset evaluation, despite the company's ability to repay debts being a crucial factor in the sentencing." "The defence lawyer claimed that he had never received any response from the Supreme Court. Zeng was executed without any prior notification to or meeting with his family members.
Zeng’s case sparked debate on the death penalty for economic crimes, with calls to abolish it. In 2025, the Ninth Amendment to the Criminal Law abolished the death penalty for fundraising fraud.