Police destroyed a 66-member virtual currency fraud gang!

Watching the police officers methodically collecting and securing evidence at the scene, Yang Xiaobo, a prosecutor from the People's Procuratorate of Pudong New Area of ​​Shanghai (hereinafter referred to as "Pudong Procuratorate") who participated in the arrest operation, could not help but recall his suggestion the night before to "arrest the suspect as soon as possible".

Several months later, Yang Xiaobo still remembers the arrest process vividly. Currently, this major virtual currency fraud case has entered the review and prosecution stage.

Statement and arrest

In January 2021, the Pudong police obtained clues that a virtual currency platform might be involved in fraud. Due to the seriousness of the case, the public security organs immediately contacted the Pudong Procuratorate to discuss the case. After careful study, the Pudong Procuratorate believed that a crime was suspected and asked the public security organs to open a case for investigation.

After investigation, the Pudong police found that this was a large fraud gang, which was spread across ten regions including Shaanxi, Zhejiang, Chengdu, Hubei, Guangdong, and Shanghai, with Xi'an, Shaanxi as the core. They used a self-made virtual currency platform to coordinate lecturers, agents and other gang members, and used the guise of investing in virtual currency to recruit and deceive people to invest through the Internet and other means, in order to defraud money.

In March 2021, with the support and cooperation of the local police in Xi'an, the Pudong police prepared to carry out the arrest. As the case was complicated and a new type of crime, it required high evidence fixation. Therefore, the Pudong Procuratorate sent personnel to Xi'an with public security officers to study the timing of the arrest and the precautions for evidence collection. Yang Xiaobo, a prosecutor from the Second Procuratorial Department of the Procuratorate, took on this important task.

"In fact, the original arrest date was not March 29, but later." Yang Xiaobo recalled that after arriving in Xi'an, they had been closely following the movements of the criminal gang and the virtual currency platform. "We found that this 'plate' (fraud platform) showed signs of disintegration. If the 'plate' disintegrates, then the arrest will be risky. The biggest risk is that if the people are dispersed, the communication group is gone, the website is closed, and the platform data is gone, then it will be very difficult to collect evidence later."

Therefore, Yang Xiaobo made a decisive decision and expressed his attitude - he suggested that the arrest be carried out as soon as possible. Because one day later, there is a greater risk of losing data; losing data means losing strong evidence. After thinking about it, Sun Qi, deputy director of the Huinan Public Security Department of the Pudong Public Security Bureau, the commander-in-chief of the net-closing operation, adopted his suggestion and decided to advance the arrest operation. On the morning of March 29, Yang Xiaobo and his colleagues in the public security once again confirmed the arrest plan and precautions when collecting evidence. In the afternoon, the Xi'an police dispatched more than 100 police officers to cooperate with the Pudong police to carry out the arrest. "This operation arrested 50 to 60 people." Yang Xiaobo recalled.

On March 31, the public security officers escorted the criminal suspects on the high-speed train back to Shanghai, with dozens of criminal suspects filling the carriage. Yang Xiaobo, who had returned to Shanghai the day before, reported the case to the court early and began to prepare for the case review in advance.

This arrest was like a signal, and the action to arrest other agents of the virtual platform scattered across the country quickly spread like a net.

Sorting and handling

As criminal dens across the country were dismantled one by one and criminal suspects were arrested one after another, a clear criminal gang framework and methods were slowly being sorted out. Due to the serious and complex case, the large number of people involved and the huge amount of money involved, the case was transferred to the Pudong New Area People's Procuratorate, where five prosecutors including Yang Xiaobo jointly handled the case.

"operations"

"The criminal 'blueprint' of this fraud gang can be divided into four sections." Yang Xiaobo introduced that the "brain" of this criminal group is the operations section located in the Xi'an region.

In 2020, several virtual currency investment platforms headquartered in Xi'an, Shaanxi Province, were quietly launched, but people did not know how much trickery was hidden behind these platforms at the time. These platforms were developed by the suspects Yang and Meng, who recruited Yang A (a technician) and others to imitate the regular international virtual currency trading platforms. They then recruited agents in many provinces and cities across the country and quickly expanded their business.

"technology"

To ensure the smooth operation of the platform, the technical section in Yuncheng, Shanxi, worked day and night. The chat records between the technical staff and the regional managers showed that the technical staff directly participated in "making plans" and assisted the regional managers in evading the investigation of the Internet police. "This was rarely seen in previous cases." Yang Xiaobo still remembers it clearly.

"acting"

Agents are responsible for selling products and services to investors, that is, the many victims in this case. Looking through the agent's script, it is nothing more than some crude words advocating "how great the situation of virtual currency is, how hot the market is", "how reliable their platform is, how thoughtful the service is", etc. Yang Xiaobo introduced that if the Xi'an region's investment promotion team recruits sales staff to form an agent team, the case handling team calls it a "direct store", while agents brought in through the Internet and other channels are called "franchise stores."

"lecturer"

The lecturer section, which seems to be at the end of the criminal chain, is actually indispensable. All criminal acts are based on the premise that they "want to attract the attention of the deceived people." Another prosecutor, Jin Yi, said: "There are lecturers in Hubei, Hefei and other places. They are responsible for giving lectures to investors. They are usually preached through online platforms, and WeChat groups and live broadcast rooms are very common." The confessions of the criminal suspects after they were arrested showed that although these lecturers also had some experience in financial investment and stock analysis, there was still a big gap between them and the false identities of having various high-quality investment resumes that they packaged.

Leading orders and killing customers

Just sorting out the entire framework took the prosecutor a lot of time. "The number of structures, the detailed division of labor, and the rigorous organization are still relatively rare," said Yang Xiaobo. The platform involved in the case was operated by the model of "regions recruiting agents, agents recruiting customers, and instructors assisting" and sharing profits.

The lecturer attracted many investors who were interested in "cryptocurrency trading" through live broadcasts or WeChat groups, and worked with agents to trick investors into exchanging RMB for virtual currency, and then deposited money into the fraudulent platform to trade in cryptocurrencies. However, since these platforms are not connected to the international virtual currency trading market, the customer deposits did not actually enter the formal international virtual currency trading market. The people behind the platform are thinking about how to put these investment funds into their own pockets.

The criminal gang members know clearly that the relationship between investors and the platform is a gambling relationship. As long as the investors lose money, the platform will have a "natural" way to take possession of the other party's investment funds, while the investors still think that their losses are normal and they can only blame themselves for their bad luck. Therefore, the role of the lecturer is "crucial". Only by having them take orders in the opposite direction can the purpose of "killing customers and eating their losses" be achieved. For example, they know that the data of the fraud platform will rise in the next second, but they say it will fall. After so many times, it is inevitable that some investors will raise questions. At this time, salesmen will pretend to be other investors to "speak for themselves" to dispel their concerns.

Strict and severe punishment

"In fact, virtual currency has only been around for a dozen years. During this period, virtual currency has become increasingly popular and hyped, and its value has been rising. Driven by the huge profits, various criminal cases involving virtual currency have begun to emerge one after another." Regarding the high incidence of telecommunications network fraud cases involving virtual currency, prosecutor Jin Yi talked about the characteristics of such cases: "First, there is a strong inducement, second, there is a strong deception, third, there may be cross-border network involvement, and fourth, there are many victims and the harm is great."

Such cases are complex, require high evidence, and are difficult to recover. Once a case occurs, the procuratorate must be extremely cautious, whether it is focusing on the handling of the case itself or considering the impact on society. In this case, the procuratorate worked together with the public security organs to sort out the case, study the evidence, and unravel the entire process and chain of the fraud on the fake virtual currency investment platform.

During the review and arrest approval stage, the prosecutors in charge "classified" dozens of criminal suspects, and worked together around multiple "links" such as investment promotion, agents, lecturers, and salesmen to break them down one by one. Ultimately, through a strict chain of evidence, many criminal suspects who had taken chances were forced to face up to their criminal behavior.

Finally, the People's Procuratorate of Pudong New Area, Shanghai, approved the arrest of 66 suspects on suspicion of fraud. According to preliminary statistics, the platform has found that the victims have lost more than 20 million yuan. At present, the case has entered the review and prosecution stage.

Prosecutor's suggestion

1. Don’t try investment projects that you don’t understand. How can a mediocre “lecturer” and a salesperson who relies on “talking skills” deceive a group of investors? In the final analysis, it is because most people’s understanding of virtual currency and “cryptocurrency speculation” is still at the level of “emerging investment” and “high profit”. They lack a deep and comprehensive understanding of its nature and its rules, so they are led by the nose. Therefore, don’t try investment projects that you are not familiar with or do not understand, no matter how tempting the promised “returns” are.

2. Don’t be tempted by high interest rates. From a financial perspective, “high returns” are usually accompanied by “high risks”. From the practice of handling cases, there are many fraud cases in which investors are attracted to deposit funds by promoting “high return” projects on the Internet, but the investors actually keep the investment funds for themselves. When investing, investors should remain rational and should not blindly pursue “high profits and high returns”, nor should they invest too much or all of their funds in so-called “high return” projects. Instead, they should invest in a more stable and diverse way.

(This article is organized by FPData, an anti-fraud big data company)

3. If you really encounter such a scam, how can you recognize it? First of all, you must be vigilant against people who contact you through the Internet and claim to be "futures platform employees" or "investment consultants". Secondly, you must verify the investment platform provided by such people from multiple sources. If conditions permit, you can consult professionals. In addition, after depositing funds, if you find that the funds have entered your personal account, stop investing immediately.