Xuhui Held Combating and Preventing Economic Crimes Campaign
May 15th of 2018 was national public security department’s 9th annual day of combating and preventing economic crimes. The theme of this year’s “5.15” campaign was “uniting with citizens to help guard their financial security,” and on this day, a huge campaign was jointly held by the economic crime investigation team of Xuhui Public Security Department, police station of Xietu Road, and Xuhui Branch of Shanghai Rural Commercial Bank (SRCB) at Chaling Greenland, Xuhui.
“Auntie, it’s not easy for you to save some money. You have to be careful. It’s your retirement money. Don’t get excited and throw your money in just because people say this is good, that is great, buy you meals, and pay for your travel. There is no such thing as no-loss-all-gain deals.” Lu Qingfa is a senior investigator with the economic crime investigation team of Xuhui Public Security Department, and naturally, he was everywhere during this year’s campaign. 57 years old, Lu has been investigating economic crimes for over 30 years, leading his team solving several major cases that were new and difficult to crack.
In the face of all kinds of ever-growing investment and financial fraud and economic crimes, Lu has something to say to us.
The combination of illegal financing with multi-level marketing
Illegal financing refers to organizations or individuals, without going through legal procedures or obtaining approval from related authorities, raise funds from the public through issuing stocks, securities, lottery tickets, investment fund securities or other certificates of creditor’s rights, and promise a payback of principal plus interests or other returns to the investors in the forms of money or in-kinds. At present, such crimes have been found in various business area including planting, cultivating, green food, project development, environmental friendly investments, membership cards, discount cards, expense cards, product sales and leaseback, buyback and transfer, “e-shop” “e-store” investment entrusted operation, and repo-to-maturity…many areas of investment might need people to have professional knowledge to avoid being tricked, and the general public always tend to be attracted by the high returns promised by some dubious managers and blindly throw their money in it.
What’s even worse is the combination of illegal funding with multi-level marketing, for example, the grave investment fraud, which is that a fraudulent companies obtains the development rights of some barren mountain to develop grave project. To achieve the purpose of fund raising, the company promotes false campaign to the public, lying about the growth potential and investment prospect of the grave, and with every level of investment amount, the company will accordingly return a certain amount of profit to the investors, plus bonus if they introduce others to join them. Investors are enjoying the high returns, and believe that they have actual product – the grave – in their hands so that they wouldn’t possibly lose anything. However, they are actually the victims of a fraud, and also the accomplices of a “Ponzi scheme.”
Illegal operation and foreign exchange trading
Foreign currencies, futures, and precious metals are not something that you can trade casually. They can only be dealt with by domestic financial institutions with legally obtained operating qualifications, or not only your own interests cannot be guaranteed, but also you can be endangered by the possibility of breaking laws.
Currently there are a number of platforms that target domestic users with offshore “foreign exchange transaction” slogan. Such platforms when doing offline campaigns often mislead investors who are not equipped with professional knowledge by a handful of successful cases, and entice them into the trap they set up, totally ignoring the high leverage and risks of foreign exchange margin trading. Since foreign exchange margin traders have only paid a very small proportion of margin, the normal fluctuations of foreign exchange price can be exaggerated several, or even dozens times, and such high risk can cause tremendous losses, which is evidenced by a fairly high proportion of ordinary investors who have suffered great losses from the trading. In recent years, there has been a number of cases about foreign exchange investment platforms collapsing and disappearing with investors’ money, suddenly shut down, or being labeled as multi-level marketing fraud.
Credit card fraud
Here is a warning to people who like using credit card and Alipay. It’s very convenient to bind your credit card with Alipay, and credit card allows people to overdraw or withdraw cash when they are in an emergency. But please remember to pay your debts on time, or you can be the suspect of a credit card fraud. It’s important to remind users that not only forging credit card, using others’ credit card, and using invalid credit card are considered as credit card fraud. According to the criminal law, knowing that you are not capable of repaying but still overdrawing your card carelessly, or using all kinds of methods to avoid repaying after malicious overdrawing is also a kind of credit card fraud.
What’s more, do not try to cash out on your new credit card to pay the debt of your old card. It seems that the card holder get cash from his credit card and reduce the expenses of interests. But in effect, he still needs to pay what he has borrowed. If he cannot pay back on time, he has to pay the interests on late payment which are higher than interests on overdraft. Using credit card to obtain cash can easily lead the card holder into a vicious cycle of supporting one card with another card and repaying debts with other debts, or what’s worse, can even leave them with a very bad credit record, or in the face of a criminal charge of credit card fraud if the card holder uses credit card to obtain cash and be late on his payment.
All in all, when presented with all kinds of investment programs and promised of high returns, it’s the investors’ responsibilities to resist these sugar-coated temptations that there are uncharted new areas of investment with the promise of getting rich fast. Formal financial institutions are always a reliable and safe choice. And individual investors should also remind themselves to develop a good habit of investment and consumption. Always buy what you can afford, and do not overdo your ability and credit.