"Zhenbao Coin" was ruled to be an illegal pyramid scheme, and tens of thousands of people including crosstalk artist Jiang Kun fell into the scam

In 2015, crosstalk artist Jiang Kun was involved in a class action lawsuit involving "Zhenbao Coin" in the United States and became the defendant (Beijing Youth Daily reported on October 19, 2015). Recently, the "Zhenbao Coin" case has made new progress. The US federal court ruled that Chen Li, chairman of the US Fuhao Group, and other persons involved in the case, violated multiple securities regulations and were convicted of illegal pyramid selling, and ordered them to return the illegal gains. Liu Longzhu, the attorney representing some victims, said that this ruling is of great help to the victims in applying for civil claims, and he is confident that he can help the victims obtain compensation within a year.

Jiang Kun was once involved in the "Treasure Coin" incident

"Jewel Coin" is a virtual currency issued by the American Fortune Group in September 2014, with an issue price of $0.05. On the Chinese website of the American Fortune Group, it claims that "Jewel Coin" is "the only virtual electronic currency in the world that, like Bitcoin, uses digital encryption to improve the security and transparency of Jewel Coin and can be legally circulated around the world."

Public information shows that the predecessor of the American Rich Group was the American Mining Company, which sold the original shares of the company in the name of developing amber mines from the beginning. Jason, a Chinese who was once one of the main members of the advisory committee of the American Mining Company, said in an interview with a Beijing Youth Daily reporter that in early 2014, due to the break in the capital chain, the company's head Chen Li proposed the idea of ​​selling treasure coins. On September 1, 2014, the public announcement began to officially issue "treasure coins" to the outside world.

According to the official website, buyers who purchase "Treasure Coins" can obtain the company's product amber gemstones, and at the same time, they will gain profits from the appreciation of Treasure Coins. In terms of sales methods, after members register as "dealers", in addition to receiving sales awards based on sales performance, they can also receive mutual assistance awards. If you invite a friend to invest $10,000, you can get a 7.5% commission; if you invite people to double digits, you will get another mutual assistance award. The American Rich Group calls this method the "direct sales operation model."

The photo of crosstalk artist Jiang Kun was questioned because it appeared in a photo promoting "Treasure Coin". Afterwards, Jiang Kun stated that he had nothing to do with the company.

Most of the victims are low-income groups

A Beijing Youth Daily reporter found that "Zhenbao Coin" has been cracked down on many times in China. According to previous domestic police reports, in 2014, the police destroyed a large-scale pyramid scheme involving more than 10 provinces and cities, including Shandong, Liaoning, Zhejiang, Guangdong, Guangxi, Yunnan, Henan, and Hunan. This pyramid scheme used the so-called original shares of "American Mining" as bait and frantically collected membership fees of nearly 1 billion yuan. In November 2015, local media in Zhejiang reported that in September of that year, the local government investigated and dealt with a den suspected of pyramid selling "Zhenbao Coin". At that time, it was found that the case had attracted 300 members and the funds involved were more than 10 million yuan.

Treasure Coin was also accused of using pyramid schemes to deceive investors in the United States. In September 2015, the American Fuhao Group was closed down, and the US Securities and Exchange Commission later filed a civil lawsuit against Fuhao Group Chairman Chen Li and 13 companies he owned.

The U.S. Securities and Exchange Commission believes that Chen Li and his company issued and sold securities without registration and engaged in fraud in the process, in violation of the U.S. Securities Exchange Act.

Liu Longzhu, the lawyer representing the victims, told the Beijing Youth Daily that at the time of the "Treasure Coin" case, there were at least 65,000 victims, "and there are still many that have not been counted, roughly estimated to be more than 100,000 people". Among these victims, there are a lot of Chinese, as well as people from other countries, "the vast majority are retired elderly people, unemployed people and other low-income groups in society, and the money they were defrauded of is their pensions and unemployment benefits that they saved from their frugal lives". According to Liu Longzhu, when the "Treasure Coin" was first sold, some people from other countries followed suit because they saw Chinese people buying it, "in their eyes, the Chinese are smart, and they can make money by following the Chinese."

In terms of the purchase amount, the amount invested by each person in these low-income groups may not be much. Because of their low income, many people only invested around 1,000 US dollars. But because there were many people purchasing, "the total amount of money defrauded should be more than 200 million US dollars," said Liu Longzhu.

“Treasure Coin” was ruled as an illegal pyramid scheme

Recently, a U.S. federal court judge ruled on the "Treasure Coin" case of the Fuhao Group, and the U.S. Securities and Exchange Commission won the lawsuit against Fuhao Group Chairman Chen Li.

The court ruled that Fuhao Group Chairman Chen Li and employees and other persons involved in the case violated multiple securities regulations and were guilty of illegal pyramid selling and were required to bear civil liability; the court issued a permanent injunction against Chen Li and ordered him to return the illegal gains.

In the verdict, the court held that the "Treasure Coin" scam took several years and was carefully planned. Chen Li did not recognize his fault and did not plead guilty or repent. If a permanent ban was not issued, Chen Li would most likely commit the crime again in the future.

"According to the current progress, the victims can expect to get their investment back within a year, at least part of it." Liu Longzhu said that the SEC's victory is of great importance to the victims who are seeking compensation from Chen Li in a California court.

The judges of the California court will use the decision of the federal court as a basis. Liu Longzhu's representation of the victims' claims lawsuits can be said to have won 80%. Although Chen Li can appeal, the federal court believes that there is no problem with the fact that Chen Li committed fraud. Even if he appeals, the possibility of a change in the verdict is very small. "In addition, Chen Li will bear not only civil liability, but also criminal liability. I believe that the federal prosecutor will definitely bring charges against him." Liu Longzhu said.