In recent years, with the increase of residents’ family wealth, especially with the vigorous development of internet finance, various financial innovations have emerged in an endless stream, but it is inevitable that there will be a mixture of good and evil, resulting in investors losing their blood. A few days ago, the reporter visited two stakeholder-type economic crimes in Shanghai and Jiangxi respectively, uncovering the inside story of new illegal fund-raising and pyramid schemes, and suggesting a brief method to distinguish online fraud.
Illegal fund-raising
The "P2P" platform promises high interest income, and all the investment funds go into personal pockets.
The cycle is 12 months, the annualized rate of return is as high as 59.2%, and the principal is guaranteed. Does this kind of financial management project make you tempted? This is an investment project that the reporter saw on a so-called "P2P" platform called "Huyi Loan". At the end of April 2015, Baiqiang Company, which belongs to this "P2P" website, was put on file for investigation by Shanghai police on suspicion of illegally absorbing public deposits.
Since March 2014, the suspect Xing Mou has set up the website of "Huyi Loan" and packaged it into an online financial investment platform, and has successively released investment targets ranging from 1 to 12 months, such as "New Technology Company Loan" and "Bozhou Equity Pledge Revolving Loan", promising to return the principal at maturity and pay high annual interest. By the time of the incident, "Huyi Loan" had raised more than 190 million yuan.
"Industry is hard to earn, and finance comes quickly." Xing was originally involved in the construction industry and beauty chain, and his business scale is not small. However, when he saw someone borrowing the concept of Internet finance, he also moved his mind. Xing explained his "P2P business model: first, publicize and package his own network platform in exchange for investors’ trust, and then release the investment target in the name of project financing. Finally, in order to make the high interest pay on time, we must find ways to attract more investors to invest, so as to fill the principal and interest of the previous investors.
"Now the profit of opening a factory for one year is 8% to 15%, and there is no possibility of profiteering in a short period within 12 months." However, in order to get funds to "rob Peter to pay Paul", Xing used three means to "promote": the first was the temptation of high interest, promising short cycle and high return on wealth management products; The second is to create a strong image through online packaging publicity; The third is to attract people to invest offline by using emotional communication and giving small gifts to win the sympathy of the elderly.
Lin Zhi, a team inspector of the Shanghai Economic Investigation Corps who hosted the case, told the reporter that the police found that although a large number of investment targets were listed on the "Shanghai Easy Loan" website, they could not correspond to the real projects in reality. "On the surface, the investors’ money entered the project, but it actually entered Xing’s personal account, which was then dominated by Xing." Lin Zhi said that as an intermediary, P2P websites should only charge service fees in matchmaking transactions, but depositing funds in the hands of individuals like "Huyi Loan" is equivalent to using this platform to form a "fund pool", which is suspected of committing crimes.
New pyramid scheme
Setting up a network platform promises that electronic money will accrue interest, and it is impossible to withdraw cash without attracting new members.
The current online wealth management products are dazzling, and there are also new pyramid schemes hidden in them. In May, 2015, the police in Yichun, Jiangxi Province filed a case: the criminal suspect used the "Happy Compound Interest Website" and "K Coin Trading System" to engage in illegal pyramid schemes under the guise of investment and financial management. After being reported by the masses, Yichun Economic Investigation Detachment found a high-level participant in the local area, Long Mou, and dug up King (its code name in the website system) who was "trading" in Luoyang, Henan Province through Long Mou — — Criminal suspect Ma.
After investigation, it was found that Kaixin Compound first asked the participants to buy at least one "wealth management product" of 1,600 yuan, and then the participants got 1,600 electronic coins to activate their accounts. Since then, 20 electronic coins will be automatically allocated to the account every day as income, but if you want to realize the profit of electronic coins, you must pull new people to join, and then sell the electronic coins to new people to activate the account, so as to go back and forth.
"Paying the entrance fee, pulling the head to develop the level, and collecting commissions are all essential features of illegal pyramid schemes." Zhang Danqing, deputy detachment leader of Yichun Public Security Economic Investigation Detachment, said that "Happy Compound Interest Network" was officially launched in October 2014, but only one and a half months later, there began to be signs that electronic coins were difficult to realize profits. "When trading electronic coins, new members must join, and old members get electronic coins through dividends and website rewards. If no new members join, electronic coins cannot be withdrawn."
In January 2015, "Happy Compound Interest Network" was unsustainable due to the slow development of new members by old members, and Ma re-developed a "K-coin trading system of Hong Kong Diamond Communication Network Technology Development Co., Ltd." platform, shifting the electronic coins of the original platform to the new platform, and claiming to change the business model, but continued to make profits by collecting membership fees and developing offline. By the time of the incident, Ma had illegally earned more than 10 million yuan, and most people who joined his network lost all their money. According to reports, the case involves many provinces and cities across the country, with a large number of people who don’t know each other, but the Internet has made this new pyramid scheme develop faster and cover a wider area. The police reminded that this form of small investment and high return is more hidden, which makes people ignore the essence of illegal pyramid schemes.
According to the police analysis, one of the reasons why Happy Compound Interest Network has deceived so many people in a short time is that it is based on the suburbs or rural areas of fourth-and fifth-tier cities, and makes use of the factors such as the fact that suburban residents and rural villagers can’t tell the truth of online information, lack of financial knowledge and weak legal concept to convince them that "Happy Compound Interest Financing" is a legal online investment and financial management project.
Scam identification
Under the official banner, promising high-interest income, promotional rebates are tempting to be fooled.
Whether it’s a P2P financial scam or an Internet pyramid scheme, it has strong concealment and temptation. How to guard against the trap, keep an eye on the principal and resist the temptation of false interests?
In order to attract investment, these investment projects and MLM organizations often play a high-sounding banner. According to the police, many illegal fund-raisers and pyramid schemes will fabricate or forge project names under the pretext of national, regional or industrial development policies, so as to fabricate "investment products" and "opportunities for making a fortune" and enhance their confusion and persuasiveness. We should be alert to the national policies borrowed or suspected in propaganda and enhance our discrimination.
In addition, in some cases of illegal fund-raising, many organizations will carry out activities in the name of overseas companies to publicize the so-called investment in overseas wealth management, gold, futures and other projects, and some will hold "investment" promotion meetings in overseas high-end hotels. In order to further enhance the credibility, there are often the following actions: a collection account will be opened in China in the name of foreigners to receive investment funds from investors; The website registration place and server location of the promised high-yield company are also overseas or the company executives are foreigners. In order to avoid supervision, websites and investment projects related to illegal fund-raising often change frequently, especially their company websites. After careful inquiry, it can be found that most of them have not been formally filed. Most companies that operate specific investment projects are not qualified to engage in financial business.
In actual operation, financial scams are often highly tempting and targeted, and some so-called "promotional rebate" activities will be organized, for example, collecting funds from personal accounts or cash, and paying the principal on-site or immediately will give part of the commission, dividends and interest. They set up stalls or distribute advertisements of "wealth management products" in streets, supermarkets, shopping malls and other places where people flow and gather, especially for middle-aged and elderly people.
In order to entice people to be deceived continuously, new MLM organizations often use the guise of "reform and innovation" in their business and investment models, such as e-commerce, consumer rebate, chain sales, franchise chain, online games, click advertising rebate, charity, love and mutual assistance, consumer pension and electronic currency trading. And add a variety of awards, claiming high returns, such as static income, dynamic income, direct push award, layer push award, touch award, see point award, report award, community performance award, etc.
