China to wage war against Ponzi schemes amid worries about social unrest
Advocation campaign for college students to warned of pyramid schemes Photo: image.baidu.com
 
Extreme Ponzi scheme gangs have been making headlines over the past week in the country after reportedly baiting university graduates with fake job position and causing two deaths inTianjin in July.

The tragic deaths have put a spotlight on the country’s unruly pyramid scheme gangs while prompting a national outcry online. Over the past week, the cyber space is permeated with condemnations toward the illegal organizations that reportedly have blighted dozens of Chinese cities and concerns about young job seekers being hunted by the malignant gangs.

Li Wenxing, 21, was found drowned in a small pond on the outskirts of Tianjin on July 14; police later confirmed the young engineering graduate from a rural family was involved with a gang of pyramid scheme “artists”. Zhang Chao, 25, was found dead on a road in the Xiqing district of Tianjin on the same day, four days after he inadvertently joined a pyramid scheme organization, the local police said.

Both the media and netizens are telling stories of unwitting job seekers being lured into Ponzi schemes by their members posing as common employers. Once they’re taken to secluded hideouts, they lose their freedom with personal belongings including identification cards and cell phones being confiscated.

After several days’ torturing brainwashing by the “leaders”, the young victims would be coerced to give out all their money, and reach out to their friends or relatives for more. Or, under duress, they may even “recruit” their own family or friends into the abyss of suffering.

The Paper reporter has talked to a young victim of Die Beilei, the Ponzi scheme organization being held responsible for Li Wenxing’s death. Tian Xiaowei (pseudonym), 24, was held by Die Beilei for over two months before he committed self-mutilation to show defiance and his parents spent RMB10,000 to hire a local pyramid scheme fighter. “This is nothing but kidnapping,” he told the Paper.


According to Tian Xiaowei, local police know where all the local pyramid scheme dens are and so would send auxiliary police there for patrolling once every three or four days. In order to avert the raids, “management” of the organization would drive all people into the fields during day time. And they’re only allowed to be back at midnight. “The rule is that there will be no more than 15 people in each hideout. Every day, all 15 of us would share only one bottle of water under the scorching sun in the open fields,” he said.

Almost all of the other 14 people living together with Tian are college graduates, and most of them are from rural families. In order to find a job to support themselves in bigger cities, the young people were deceived by fake ads into the dens of scammers.

“We were followed around the clock. After I stepped into the yard of a single-storey house where all the victims were held, they took away my shoes,” he said. During the following two months, no matter it’s raining or in scorching heat we went to the fields barefooted. The organization finds this as a good way to prevent people from running away.

During one raid, Tian’s cell phone was taken away by the auxiliary police. To his disappointment, no police came back to him after that. Tian and other victims were forced to post more fake positions on recruiting websites including Boss Zhipin, the one that led Li Wenxing to his fatal end.

Since the tragic deaths of the two innocent young men, the authorities have quickly reacted with local police forces vowing to launch a 20-day crackdown, assigning around 3,000 officers to ferret out the illegal organizations and arresting nearly 100 suspects.

According to local police, they detained more than 400 suspects in 2015 and 2016. It was previously reported that in Tianjin’s Jinghaidisctrict where Li Wenxing was found drowned, pyramid scheme organizations like Die Beilei are rampant.

China’s aggressive Ponzi scammers drew media attention in late July, when the South China Morning Post reported a demonstration by Shanxinhui members in China’s tightly policed capital city after authorities closed down the illegal fund and arrested its ringleader. Shanxinhui, also referred to as Kindness Exchange has at least five million members and claims to help with poverty alleviation.

One day before the protestors gathered by Shanxinhui members, China’s Public Security Ministry declared China will crack down harshly on shady financial schemes considering they may lead to social unrest. The move is interpreted by some analysts as part of the Chinese government’s determination to safeguard the country’s financial stability.

The South China Moring Post has cited lack of financial knowledge, immature financial regulation system and a decade of low interest rates as reasons behind Chinese people’s vulnerability to Ponzi schemes. 

 


Related Stories
Share this page
Touched Sympathetic Bored Angry Amused Sad Happy No comment

China to wage war against Ponzi schemes amid worries about social unrestDaan Roosegaarde: A Dutch artist’s mission to clear smog from Chinese citiesUS beef sales face hurdles in ChinaMan's death sparks public outcry over lax regulation of Internet firmsTrump threatens China with new trade war, Beijing appears unmovedPatience has 'bottom line', India toldWill unmanned stores take off in China?Trump administration to act against alleged China trade violationsStarbucks shifts gear in China with big acquisitionCandid dialogue key to improving China-South Korea relations
< Prev Next >