Defrauding 130,000 people and making 2 billion: A pyramid scheme under the halo of Chinese Americans

Every year, tens of thousands of Chinese leave their hometowns and go to the United States with the American dream in mind. However, every year, countless people, who are at a crossroads of life elsewhere, mistakenly believe in the hype of making quick money and join the MLM army.

Among them, there are well-known dignitaries, well-known Chinese "overseas Chinese leaders", wealthy businessmen, and new immigrants who have just landed. But the sad thing is that MLM not only failed to make them rich, but also made them lose everything and fall on the road of pursuing their dreams.

The protagonist we are going to expose today is the Wanfuhui, a pyramid scheme organization that originated in California and recruited as many as 130,000 members in just three months, and crazily collected nearly 2 billion yuan in pyramid scheme funds.

Plainclothes police escorted Liu Ning and Meng Yang onto a flight to Beijing.

Wanfuhui is a virtual currency that has just emerged in Los Angeles, California. The founder is in the United States, but the pyramid scheme market is mainly in mainland China, with more than 60 core members in the mainland. According to "sources", on August 8, Liu Ning, the founder of "Wanfu Coin", and his assistant Meng Yang were arrested at Taoyuan Airport in Taipei, Taiwan, and were transferred to the Fox Hunting Operation Team of the Ministry of Public Security of China.

But how did this unprecedented "major online pyramid scheme" deceive 130,000 people and make over 100 million yuan in just a few months? ! Was it because their methods were sophisticated and flawless, or were the members just confused and obsessed with money?

Police, Liu Ning (second from left), and Meng Yang (second from right) at the airport. (Provided by an insider)

Concept brainwashing: virtual currency is the future trend

"This year is the first year of the development of virtual currency - this is a future payment trend." This is an idea circulating in the Wanfu Coin investor circle, and it is also the first sentence that almost every "Wanfu Coin" member is brainwashed by.

The Q coin that we are most familiar with is actually a type of virtual currency. The US Financial Crimes Enforcement Network defined it in 2013 as: "Virtual currency is a medium of exchange that operates like physical currency in some cases, but does not have all the attributes of physical currency and does not have the status of legal tender."

The promotional materials of "Wanfu Coin" say that Wanfu Coin is the first virtual digital currency to be approved by the US "Banking Regulatory Commission" and can be legally circulated and used as securities and virtual currency in the United States. However, it was later confirmed that Wanfu Coin was not found in the authoritative "Global Existing Digital Currencies" ranking list in the virtual currency field.

A virtual currency industry insider said that there are a lot of scams using virtual currencies on the market. Even virtual currencies themselves, which are ranked after 50th on the list, have high investment risks, not to mention currencies that cannot be found in any records. In fact, virtual currencies still have a long way to go as a payment method.

Listed companies lure: Investment immigrants take the bait

Compared with Treasure Coin, which claims to be backed by an amber mine in the Dominican Republic, Liu Ning, the founder of Wanfu Coin, seems to be much more "reliable". He actually has a listed company under his name and a genuine Nasdaq code, making it more deceptive.

Liu Ning of the New York Stock Exchange (Internet photo)

The listed company that Liu Ning promoted was called Global Future City Holding Inc., with the ticker FTCY. It was listed on the Nasdaq on October 31, 2014, and it operates functional beverages, real estate development, and also listed its packaging business. It was later confirmed that it withdrew to a small exchange OTC (over-the-counter market) instead of continuing to be listed on the Nasdaq.

The "Future City" company is located in Building 2 of Park Plaza in Irvine, which is full of high-rise buildings. This company is located on the 4th floor of the building. Even when the door is locked after get off work, the lights in the office area are still bright.

Liu Ning also claimed that in addition to Future City, he had more than 40 listed companies under his name and had large real estate projects in the United States and Europe. However, the police investigation confirmed that Liu Ning's 13 companies in mainland China were all "three-no companies" (no office buildings, no licenses, and no one operating them).

There is a video circulating online in which Liu Ning, with an expression that says "the secret cannot be revealed", tells members how to use "Wanfu Coin" and "Future City" together: "We will have our own bank, and all this is under the framework of a listed company. Our main purpose is not to promote coins, but to promote "Future City" and build this city.

The Immigration Bureau has approved one of our investment immigration centers, and anyone who buys a house in our "Future City" can obtain a US green card."

According to one of the investors, they invest by purchasing Wanfu coins, which are ultimately invested in the Future City project in the United States, and in entities. These entities are more than 20 health products and more than 10 cosmetics they operate, including "White Coix Pure", "Kung Fu Drinks" and "Digestive Enzymes". Investing in their properties can directly obtain an investment green card.

However, after verification, it was found that "Global Future City" was not found in the list of EB-5 investment immigration regional centers approved by the U.S. Immigration Service.

Screenshot of Wanfucoin official website

Moreover, Liu Ning said that Wanfu Coin is not only used for investment. He said that he has already negotiated with Hong Kong banks to allow Wanfu Coin to be directly connected to UnionPay and MasterCard.

It is said that after the official launch of Wanfu Coin's VISA card and Mastercard card, the word Ruitai will be changed to [Future City] or [Wanfu Coin].

In fact, only the central bank is qualified to issue digital currency. This kind of digital currency cannot be circulated externally at all, let alone have investment value.

Title protection: Claiming to be "former deputy secretary of state of California" and special adviser to the president

Now it is not difficult for a company to go public, so how can it gain greater trust from members? Liu Ning thought of a tried and tested method: "I have someone above me"!

A common feature of scams in the Chinese community is using titles to deceive people and using photos with celebrities to endorse themselves.

According to the online self-introduction of Liu Ning, the president of Future City, he has more than ten titles, and any one of them is enough to scare people to death, such as the former deputy secretary of state of California, and even the president of the United States.

Clinton and Bush special adviser. The website also displayed a photo of Liu Ning with President Obama and President Clinton.

Liu Ning's photo with celebrities. (Internet photo)

The funny thing is that it was later confirmed that California had a Chinese female secretary of state from 1975 to 1994, and there is no news of another Chinese person serving as California secretary of state. As for the things between him and Clinton and Bush, it seems that there is no way to verify them.

8x ROI: Are you tempted?!

Regardless of whether the listed companies and these titles are real and credible, what attracts investors more is the high rate of return!

"The annual rate of return is conservatively estimated to be about 3 times, and if the development is good, it may reach 5 to 8 times. If you invest 600,000 yuan, you may have nearly 5 million yuan in one or two years." The high returns they advocate for this type of investment are almost unreasonable!

Wanfucoin online advertising

According to Wanfu Coin investors, this part of investment income comes from two aspects. On the one hand, it relies on cashing out from the rise in the trading price of Wanfu Coin in the US market. On the other hand, it relies on the investment returns of multiple projects such as real estate invested by a company called "Future City".

However, the investment cannot be cashed out immediately and there is a thawing period of up to half a year. Starting from one month after the investment date, investors will unfreeze 5% of the total investment amount every week, and all of it will be unfrozen after 30 weeks.

Some industry insiders said that Wanfu Coin is actually "corporate currency", that is, virtual currency circulated in the enterprise system. The accounts of corporate currency are very beautiful, with a unilateral trend, only rising and not falling, and the price is controlled by the enterprise. However, when selling and cashing out, you need to queue up, and the final result is unknown.

A huge offline system: “there are people” both above and below

With a legitimate listed company as a backer, you can directly obtain a green card and even cash out the Wanfu coins you purchased. The seemingly rigorous investment strategy, coupled with Liu Ning's "Amway"-like eloquence, has won the hearts of many people. But these are obviously not enough. Without a meticulous pyramid scheme system, it would be impossible for Liu Ning, who is far away in the United States, to deceive the hearts of 130,000 investors in the mainland in just a few months!

Wanfucoin is a virtual currency investment project launched in February 2016, only six months ago. A large number of investors have entered this circle waiting to realize their "dream of getting rich". According to the survey, the project currently has three areas in China from north to south.

Each area has a project leader, each of whom has developed thousands of investors under him, with investment amounts ranging from 50,000 to 100,000 to hundreds of thousands. What is even more confusing is that the above-mentioned team leaders do not actually understand which level they are in the overall promotion team. They only know that "there are people" above and below, and every investor also has the right and opportunity to develop downlines.

The rules of the Wanfu Coin game are that the membership levels are divided into star, gold and diamond levels, and each level is divided into five levels:

(Picture of Wanfucoin WeChat platform)

Assuming the minimum commission rate for developing downlines is 10%, if a downline invests 10,000 yuan, he will be able to obtain 10,000*(10%+10%)*70%, or a profit of 1,400 yuan.

The police investigation found that Liu Ning encouraged members to develop a large number of downlines through such an attractive bonus system.

Liu Ning said that there are two main types of investors who come to him: one is businessmen, and the other is retired government officials. In addition, it is not ruled out that ordinary people use their hard-earned money to invest.

In order to collect and transfer pyramid scheme funds, Liu Ning arranged Meng to be his domestic agent and registered 13 "shell companies" in Shenzhen, Chongqing, Guiyang, Beijing, etc. On April 27, Changde police began to close the net after finding out the operation mode, organizational structure, and capital flow of "Wanfu Coin". They arrested more than 60 backbones, agents, and network heads involved in the case, and found out that the pyramid scheme amount was nearly 2 billion yuan!

These are all "pits" dug by pyramid schemes

As Bitcoin becomes more popular, various "copycat coins" that copy the code and imitate the operation frequently appear, and some of them are virtual currencies created for the purpose of making money. Most of these copycat coins are virtual currencies generated by programmers who copy the source code of Bitcoin and modify a few parameters. Their profit model is often to first create a copycat coin, then establish several communities and chat groups, and then sell them out when the price of these copycat coins goes up.

Today, a "Wanfu Coin" was caught, but there are still more similar virtual currencies that we need to identify! Naturally, the means of pyramid schemes are far more than these. In addition to the guise of financial investment, they may also be a phone card, a set of beauty products, or even a drink with magical effects. . How to judge whether they are new high-tech things or new pyramid schemes?

The US SEC (Securities and Exchange Commission) has given several criteria for judging pyramid schemes:

No real product or service:

Be cautious when there are no real products or services being sold to others, or when what is being sold is speculative or priced unreasonably.

The promise of high return on investment in the short term:

Be skeptical of exponential investment returns and "get rich quick" claims.

Easy money or passive income:

If you are offered a small amount of work in exchange for payment, such as making payments, recruiting other people, and posting advertisements, you should be cautious.

No proven gains from retail sales:

Ask to see accounting documents, such as financial statements audited by a certified public accountant (CPA), that prove the company is generating revenue from selling its products or services to people outside the program.

Request to buy:

Be careful if you have to buy into a plan, even if the buy-in is just a nominal one-time or recurring fee (like $10 or $10 per month).

Complex commission structure:

Unless the commissions are based on products or services sold by you or your recruits to people outside the program, you should be careful. If you don't understand how you will be compensated, then you should be cautious.

Emphasis on recruitment:

If the plan relies primarily on recruiting others to get paid, or if the compensation for recruiting others is greater than the product sold, then it is likely that the project is a pyramid scheme.