According to relevant laws and regulations, if the income comes from the commission of recruiting downlines, with more than 30 people involved and over three levels of hierarchy, it can be defined as illegal pyramid selling. The Nantong police analyzed that compared to traditional pyramid selling, online pyramid selling exhibits new criminal characteristics, such as: no geographical restrictions, no products, no need to gather crowds, no need for office locations, strong concealment, fast dissemination speed, and huge amounts of money involved.
A meat stall owner spent 20,000 yuan to buy "one-star" original shares. According to a report by the current episode of "Focus Talk," the public security bureau of Rugao City, Nantong, Jiangsu Province, cracked a major case of new-type online pyramid selling, involving funds reaching 100 million yuan. The modus operandi was first to register an empty shell international investment company abroad, then fabricate so-called original shares of the company; second, rent foreign servers, create false web pages and false stock price trend charts, sell fictitious electronic equity; third, hold high-profile luxurious press conferences to gain investors' trust; fourth, use high commissions and rewards to induce investors to develop more downlines for them. These methods combined achieve the purpose of illegal pyramid selling and rapid wealth accumulation.
He told the reporter that he and Mr. Zhu were old colleagues, and after being persuaded by him, he decided to buy. "Didn't you investigate where the company is, whether it's registered or not, before spending tens of thousands of yuan to buy its stocks?" "Ah, I still had a侥幸psychology." He said, "At first, I didn't believe it either. It's like deceiving children, but why am I so foolish?"
The promotional materials claimed that Barrick Gold Corporation, one of the top five gold producers in the world, fully supported its Greater China branch company's plan to go public before 2013, hence conducting equity investment within China. If you bought the original shares of this company, it would be an excellent investment opportunity akin to finding money falling from the sky. Currently, dozens of people in Wuhan have purchased the so-called original shares of this company with dreams of getting rich, but now it seems their dreams have been shattered.
Afterwards, for more than half a month, Mr. Guan lost interest in doing business, running to Mr. Zhu's house every day. There were always dozens of people gathered at his house, all of whom had bought or wanted to buy original shares, mostly Mr. Zhu's old colleagues and friends. Those who wanted to buy were each given a brochure, which introduced Barrick Gold Corporation, the prospects of gold investment, and a rough explanation of the original share investment plan, along with a video of the grand press conference held by the company in Macau.
Sure enough, when the time came for the second return on interest, Mr. Zhu said there was no capital turnover, asking Mr. Guan to keep the interest inside and earn more. Mr. Guan watched his money increase like rolling snowballs on the internet, but he couldn't withdraw it, feeling extremely anxious.
Yesterday, Detective Huang from the Hanzhong Police Station introduced that because their jurisdictional resident Mr. Zhu was not in Wuhan all along, they only brought him to the police station for questioning after he returned to Wuhan during the Spring Festival this year. According to Mr. Zhu's confession, he developed three or forty downlines, each needing to buy original shares worth more than 20,000 yuan, thus the total amount was at least one million yuan. Mr. Zhu claimed he transferred the money to his upline in Chongqing, who then transferred it to the Hong Kong headquarters. Detective Huang has requested Mr. Zhu to provide remittance receipts and find his upline.
Mr. Guan, living in Hanyang Hanqi Community, is 43 years old. He has worked hard in Wuhan for 20 years and settled down here by selling pork. A few years ago, he invested 200,000 yuan earned from selling pork into a small clothing factory, unfortunately the factory failed, and he had to get up early and work late again to resume his old job of selling pork. He has always dreamed of having an opportunity to make back the money he lost.
Last May, Mr. Guan heard from his neighbor Xiao He in the community mahjong room about a quick way to get rich, so he went to He's house. Xiao He skillfully opened the computer, entering while introducing. It turned out that Barrick Gold Corporation abroad issued original shares, divided into five stars (five levels) according to the investment amount, starting from one star, requiring the purchase of 3000 US dollars of original shares (uniformly converted to RMB at 1:7), with an interest of 42 US dollars, and monthly benefits distributed in three installments. If you bought now, there would be a discount, returning interest at two stars at 257 US dollars, whereas previously investing at two stars required purchasing 10,000 US dollars.
Ignoring his wife's opposition, Mr. Guan borrowed more than 20,000 yuan from his brother-in-law and went with Xiao He to the home of Zhu, his upline living on Hanzhong Road in Hankou, to pay the money. He later learned that each person buying original shares could develop downlines, earning a commission of 5000 yuan for developing three people. This Zhu was the main leader in Wuhan, with at least thirty downlines under him, some even buying more than 60,000 yuan worth of original shares.
After paying, Zhu did not even give him a receipt, only providing a website and password. With the password, he could log into Barrick Gold Corporation's website to see the stock price trends of the original shares he purchased, returns, and capital return situations. Zhu also took out 925 yuan from the 21,000 yuan and gave it to him, saying it was the first interest return.
Detective Huang said that the case involves pyramid selling and may also relate to overseas companies, and with the strength of the police station alone, it is insufficient. They will immediately report to their superiors and increase resources for investigation.
Realized he was deceived after seeing "Focus Talk"
In June last year, the subsequent interests were never returned, and Mr. Guan foresaw that he was deceived. It wasn't until he watched the September 25th episode of "Focus Talk" that he realized the scam reported was almost identical to his own experience, and he completely gave up hope.