The "Ponzi Scheme" of Treasure Coin has fermented, and the famous crosstalk actor Jiang Kun has been listed as the defendant

The lawsuit against Chinese investors for the $100 million Gemcoin "Ponzi scheme" has further fermented. Liu Yinquan, a victim of the Gemcoin scam, and Los Angeles Chinese lawyer Liu Longzhu filed a class action lawsuit in the Los Angeles County Superior Court earlier this month, accusing the American Regal Group in Arcadia, Los Angeles of defrauding victims through the pyramid scheme of "Gemcoin". Surprisingly, in addition to Regal Group President Steve Chen, Arcadia Chinese City Councilman John Wuo, the defendants also include the famous domestic crosstalk actor Jiang Kun.

At the same time, the class action lawsuit filed by the victims of Treasure Coin also accused organizations related to the Fuhao Group, such as the China-U.S. Political Consultative Conference (UCCA), of 13 charges including fraud, breach of contract, securities fraud, etc., and the amount of compensation sought exceeded US$100 million.

At the press conference, the victim's attorney Liu Longzhu displayed the promotional materials of the Fuhao Group and related companies. The defendant, Arcadia Chinese City Councilman E Zhichao, had spoken for the Fuhao Group's activities many times, including the launch of the so-called digital currency Treasure Coin. When questioned by the media, he said he was being used. E Zhichao suddenly resigned from his position as a city councilor on the evening of the 8th, and the mayor read out his resignation letter on his behalf. It was said that he resigned for health and personal reasons.

Jiang Kun: Never participated in the Treasure Coin scam

On October 8, Jiang Kun, a crosstalk artist who was listed as a defendant in the Treasure Coin class action lawsuit, commissioned Los Angeles lawyer Zhao Lian to send a letter to the plaintiff's lawyer Liu Longzhu on October 9, claiming that the materials publicly published by Liu Longzhu were false and seriously damaged Jiang Kun's personal reputation, and asked the prosecution to clarify.

The lawyer's letter pointed out that, first of all, Jiang Kun never agreed to become a member of the "China-US Political Consultative Conference Promotion Association." He also never participated in any activities with the association or the American wealthy group.

At the same time, Jiang Kun himself also issued a public statement and warned investors not to believe any fundraising propaganda made by the promotion association using his name.

The lawyer's letter pointed out that in July 2014, Jiang Kun issued a public statement, clearly distancing himself from the association and warning investors not to trust any fundraising propaganda made by the association using his name.

However, Liu Longzhu questioned Jiang Kun's statement that he had drawn a line in the sand. He pointed out:

First, Jiang Kun’s statement was only released in July last year, while his clients had already invested in Gemcoin in January last year;

Second, Jiang Kun said that he had no relationship with the American wealthy group, but this does not mean that he has nothing to do with the "China-US Political Consultative Conference Promotion Association";

Third, Jiang Kun claimed that all the fund-raising activities held in Japan under his image and name were scams, but he did not mention the company's fund-raising activities in the U.S. Liu Longzhu once showed a printed material of the promotion association, which had photos of Chen Li, E Zhichao, and Jiang Kun, and the text stated that they were all the initiators of the promotion association.

Lawyer Zhao Lian pointed out that if the prosecution could not produce solid evidence to name Jiang Kun as the defendant, Jiang Kun would file a lawsuit for defamation, abuse of power and false accusation. She strongly urged Liu Longzhu to stop accusing Jiang Kun.

The victim's lawyer requested that Jiang Kun confront him face to face

The plaintiff's lawyer Liu Longzhu replied to Zhao Lian on the same day, inviting Jiang Kun and his lawyer to hold a press conference on October 22, so that both sides could confront each other, present evidence, and clarify the facts. Liu Longzhu said that if Jiang Kun's evidence and explanation were satisfactory, he would ask the plaintiff to stop accusing Jiang Kun.

An anonymous victim of "Treasure Coin" provided lawyer Liu Longzhu with explosive information, and photos showed that Jiang Kun had a close relationship with Chen Li, president of the Fuhao Group.

What the hell is the “American Rich Group”?

Pyramid schemes are not new. In the digital age, virtual currency has added a new selling point to pyramid schemes. On September 9, 2014, a virtual currency called gemcoin was born in Los Angeles. According to the gemcoin website gemcoin.ch, its founder is an African American named Leonard Johnson. However, there is another name that frequently appears behind him. This person is Steve Chen, the owner of US Fine Arts Investment Inc. (USFIA, also known as American Mining Co., Ltd.), which is headquartered in Arcadia, Southern California.

A group of Chinese investors protested against the "American Rich Group" outside the Ontario Convention Center in San Bernardino County, calling the Gem Coin it issued a big scam and distributing information to attendees.

On the morning of August 28, an investment forum originally scheduled to be held by USFIA at the Ontario Convention Center in San Bernardino County, California, was canceled due to a group of angry Chinese protesters who claimed that the Gem Coin issued by USFIA was a big scam.

Mr. Liu, a representative of the protesters, said that he first heard about American Mining in December 2013. He met Chen Li through a friend and bought a 10,000-dollar unit (share) and amber from American Mining. Chen Li told him that American Mining was a very powerful company with 50 billion assets and could go public in half a year. After going public, the unit they bought could increase in value by 64 times, and the amber could also increase in value by 64 times. But to this day, American Mining has not gone public, but has only changed the unit to treasure coins.

Mr. Liu said: "Chen Li said that their amber was authenticated by Chinese experts. It was Dominican amber and of very good quality. He sold it to us at only half the factory price. I was very happy to hear such good news. He also said that the amber market will be very good in the future and will increase 64 times. We thought we could get both the unit and the amber, which was very good. He also told us that the unit he sold to us could be traded after two months. Each trade should not exceed 10%. As a result, we have not been able to sell it for a penny so far. We bought a piece of waste paper. There is not even waste paper, just air."

Encouraged by his friends and persuaded by Chen Li, Mr. Liu, his wife, daughter, sister, and the entire family purchased a total of $70,000 in Treasure Coins. In addition, Chen Li claimed that he could apply for EB-5 investment immigration by investing in the Riverside County Prison Renovation Project, and his sister invested another $280,000 in investment immigration, but all of them were lost.

There are many companies related to mining in the Americas, including the China-US Consultation Association (UCCA) and the Alliance Financial Group (AFG). According to the Gemcoin website, Chen Li is the founder of AFG and the vice president of UCCA.

Outside the USFIA Investment Forum, the reporter obtained a set of beautifully printed brochures, one of which introduced the amber products of American Mining Co., Ltd. Another introduced the "Sino-US Political Consultation Promotion Association", which prominently printed with four celebrity photos: (sensitive figures hidden), Chen Li, Arcadia Mayor John Wuo, and China's famous crosstalk actor Jiang Kun, and claimed that the association was jointly initiated by them and more than a dozen US congressmen and Chinese CPPCC members.

The American Investment Alliance Group is even more powerful. According to a press release issued by the company in the Chinese media in the United States, it is "a large multinational enterprise, AFG Group, which invests in finance, real estate funds (REIT), real estate mining (gem), auctions, communications, biotechnology and aviation equipment, etc., with business in North America, South America, Europe, Asia and Australia. AFG Group's total global assets amount to more than 50 billion US dollars, with more than 2 million users worldwide, and will establish 3,000 gemstone chain stores. All of this has laid the foundation for the unrivaled market of Gem coin and the relative stability of its currency value."

However, the websites of the California and Delaware secretaries of state show that the China-US Consultation Association has been dissolved and the legal status of the AFG Group has become void. Both units have ceased to exist.

In addition, the website of Treasure Coin is full of typos in English, which is also suspicious.

A retired doctor named Liu who participated in the protest said that he came to the United States with his family in 2013 and was introduced to American Mining by a friend. At that time, his friend said that this industry was doing very well, so he decided to support it and invested $12,000.

However, Dr. Liu said that he did not understand this business and did not know much about the United States. At that time, his family members and relatives were also worried that it was a scam. But because he trusted his friends and met Chen Li in person, Chen Li said that he had a mine, and Dr. Liu felt that what he did was very formal and legal.

Dr. Liu said that Chen Li said that the company could be listed in half a year and could be traded online. The money would multiply very quickly and should have multiplied 20 times by now. But two years have passed and now even the principal invested cannot be withdrawn.

When Dr. Liu realized something was wrong, he couldn't see Chen Li in person even when he wanted to. Her friends also gradually discovered that the "treasure coins" were fake. The money was tied up there and they couldn't use it even if they wanted to.

Dr. Liu said that when he first heard about the "China-US Political Consultative Conference" organization, he thought it was great and could help Chinese people, but he found out that there was no such organization at all, and it was all fake and deceptive. Everything was wrong.

Dr. Liu hopes to use this opportunity to prevent others from being deceived. On the other hand, she and other protesters will appeal through legal means to get back their hard-earned money.

Liu Longzhu, a San Gabriel lawyer who once filed a class action lawsuit on behalf of investors against Luca International Group, a company in the California Bay Area that was accused by the U.S. Securities and Exchange Commission of running a Ponzi scheme, said that he witnessed the American Mining Investment Conference with thousands of people at the San Gabriel Hilton Hotel two years ago. The scene was quite crazy, but it was very funny to him. Participants were told that they would be taken care of if they joined the "big family" of American Mining. Some people also shared their personal experiences and showed off their brand new S-class Mercedes-Benz cars that they bought with their own money, and the audience was fascinated by them. He said that this kind of illegal fundraising through Ponzi schemes is common in the Chinese community, and what is puzzling is that people continue to fall for it, including successful people.

He believes that American Mining is likely to be a Ponzi scheme that is bigger and worse than Loscam, and said that victims can not only complain to government agencies such as the Federal Bureau of Investigation (FBI), but can also initiate civil class action lawsuits to seek compensation.

As of now, the American Rich Group and Chen Li himself have not responded to the protesters' accusations.

Although Chen Li and his USFIA have no record of violating the law in the United States, according to reports by Xinhuanet and other official media in China, "American Mining" used so-called original shares as bait to make 1 billion yuan through pyramid schemes in mainland China. The pyramid scheme is: participants pay membership fees of 1,000 US dollars, 2,000 US dollars, 5,000 US dollars, etc. to obtain membership. Members are divided into different levels, and profits are made by recruiting people and developing downlines.

As of June 2014, this pyramid scheme had developed more than 180 levels of members in China, totaling more than 80,000 people. In November, the Changde police in Hunan Province, with the cooperation of the Thai police, arrested the two leaders of "American Mining" who had fled to Thailand, "Lu and Chen".

As for how "American Mining" transformed itself into the "American Rich Group" and settled in Arcadia in Southern California, it is unknown.

Chinese victims not involved in the case

Liu Longzhu said that the class action lawsuit does not include Chinese victims because China does not have a class action procedure, but a Chinese victim contacted him, claiming that he was defrauded of $1 million. He hopes that Chinese victims will take the initiative to contact him and try to recover their losses.

Liu Longzhu displayed promotional materials of Fuhao Group and related companies at the press conference, many of which were celebrity photos transplanted using computer software.

The first defendant listed in the class action lawsuit is Chen Li, and the second is Arcadia's Chinese City Councilman E Zhichao. He has served as a city councilman for twelve years and has served as mayor three times. His current term will not expire until April next year. He did not attend the meeting on Tuesday night. Instead, the mayor read out his resignation statement on his behalf. He resigned due to health and personal reasons.

Chinese American city councillor resigns suddenly

But his resignation and the investigation into the Rich Group case occurred at the same time. The Pasadena Star pointed out that the Fair Political Practices Commission is investigating whether E Zhichao violated the Political Reform Act, which involves the declaration of economic interests and conflicts of interest.

Liu Longzhu explained the reason for suing E Zhichao at a press conference. He pointed out that E Zhichao had endorsed the Fuhao Group and related companies in many online videos. He told the public directly at the group's activities that he was the mayor of Arcadia. This had a great impact on Chinese investors because Chinese investors believed that companies that were openly supported by government officials not only meant the legitimacy of the company, but also represented the potential to make big money.

Surveys at all levels of government

The Fuhao Group was recently raided by the FBI and charged with fraud by the Securities and Exchange Commission, which accused the group and several related companies and individuals of using fraudulent methods to promote so-called treasure coins to investors in the United States and overseas, boasting that treasure coins are better than the virtual currency Bitcoin. A federal judge ordered the freezing of the assets of the group and Chen Li. The California Department of Business Supervision is also involved.

E Zhichao is not on the list of SEC charges. He was interviewed by local media in Arcadia a few months ago and said that he was also used. He also told the Los Angeles Times that he had nothing to do with Gemcoin and his image was used without consent.

Liu Longzhu believes that although Jiang Kun came out to distance himself from the Treasure Coin incident, he was used as a publicity figure by the Rich Group in the past few years but did not draw a clear line between the two, so he was listed as a defendant.

The lights in the Volvo Group's office building in Arcadia remained on in recent days, but it was empty and no one could be contacted.

Beware of compound interest investment, game-based financial management, and online financial management scams

Since 2015, a large number of Ponzi schemes and online pyramid schemes have been discovered under the names of "compound interest investment, game financial management, online financial management", SMI, MBI, Mark Coin, Dark Coin, Baichuan Coin, MMM and other virtual currencies and financial compound interest... Countless people have flocked to them, one after another, one scam after another, defrauding many people, and even many people have invested in these similar scams one after another, with the same methods, the same scam, and the same dream.

On August 8, 2012, the "Inter-ministerial Joint Conference on Dealing with Illegal Fund Raising" composed of 18 ministries and commissions issued a warning message: Participants in illegal fund raising will bear their own losses! Reject the temptation of high interest rates, illegal fund raising is not protected by law! Be wary of fund raising fraud traps in the name of private equity, online investment, intermediary financial management, etc. The warning information issued this time is mainly aimed at the current emergence of network-based financial pyramid schemes such as "equity investment", "compound interest cycle investment", "online financial management", "game financial management", "virtual currency", etc. The situation of pyramid scheme crimes accompanied by illegal fund raising is becoming increasingly serious.

The above are some typical cases, each of which is a scam. Most of them have been investigated and dealt with, and some have shut down their networks and run away. At present, there are still a large number of similar new scams emerging. We are also vigilant that these same scams will continue to be rampant in the future. We hope that the general public will still be vigilant and not fall for such scams.

1. Anzi’s so-called listing is a bold pyramid scheme to recruit people and deceive people, and the funds have already been transferred to the United States.

2. OneCoin has been split up. The internal transactions alone have eaten up the money. How can it still distribute money? It is not a constant issuance, it is just speculation, it has no commercial application, it is suspected of capital outflow, there is no responsible person in China, and the model is illegal.

3. Kra currency and the China-Thailand cooperation to develop the Kra Canal are all fake, and the Chinese government has come forward to clarify.

4. Petro, a British currency, collapsed two months ago and all connections were lost.

5. Huaqiang Coin and China Unicom 4G disappeared within a few days.

6. Darkcoin is completely dead, and all the people have run away.

7. CB AIIB Hong Kong Group Co., Ltd. was very popular in China, but it disappeared in a few months!

8. Bisheng, in Dubai, can’t withdraw money. Are you stupid?

9. The World Dollar, from Dubai, has been split, and the principal has shrunk by more than 20 times. I can’t pay out any more, woo.

10. U-coin, from Thailand, has been split, the market has reached a bottleneck, and the added value is almost zero.

11. Baoli Hengyuan, which was connected to the international system, had its website shut down, the market was in turmoil, and was investigated and dealt with by police in many places in Hunan.

12. Tianman International Forex, its official website disappeared in less than 3 months and all companies lost contact.

13. Jubao cheated people out of hundreds of billions and lost them all.

14. After many twists and turns, the Mark currency is now on its last legs and is close to running away.

15. MMM’s so-called international platform, after failing to operate in one country, is developing other markets and taking over at high prices. Members have begun to have difficulty in withdrawing cash.

(This article was compiled and reported by Huishang Comprehensive Kaidi Community, Anti-MLM Network, Los Angeles Chinese Information Network, Qiaobao Network and other media)