Sometimes making history is not a good thing. That is the case for the 200 million customers scammed by the most extensive online fraud scam to ever come out of China. At one point, this particular scam was so well loved by the people of China that the website was seeing 2 million new users every day.
Between the 200 million users, the man behind the scam was able to raise $ 11 billion illegally. This was done via a website that promised quick returns and to grow the average citizen’s investment by 80%. In this case, everything looked too good to be true and when the website creator was arrested, everything fell apart.
All of the money raised came through the website Qbao.com that was part of the Qianbao company. Translated this means “money treasure.” For those looking to make money quick, this was a Godsend. They quickly garnered national attention and even created a loyal group of fans that were called Baofen. In the end, many found out this was a simple version of a Ponzi scheme.
The site was created by Zhang Xiaolei. He was taken into police custody at the end of 2017. While the arrest might seem like a positive move to end the problem, it also signals the end of hope for many who saw this as their way to get rich overnight. The website promised and sometimes delivered significant returns, but it was just using the new money to fake results for other investors. A limited amount of early success seemed to lead to a lifetime of trust and customer loyalty.
Xiaolei walked into a police station in Shangai on December 26th to turn himself in. He received word that he was wanted for illegally raising over $ 11 billion from online scams. Instead of making investments to earn the massive returns the website promised, he was using the money being invested by new customers to pay out established customers. The long-term customers thought their money was being invested, but it was not. It was an on-going cycle of using new investor money to pay out older investors.
This type of scam hit China very hard as many average workers find themselves in need of quick cash. Even after news got out about the arrest tied to the website, many loyal customers were in denial about the theft. There was still activity on the site even as customers found all of the accounts frozen.
Police are reporting that many of the customers have shared the belief that this is merely a mistake and their money is only frozen in the short term. There is an assumption that this is all a misunderstanding and it will be cleared up. At the current time, this does not appear to be the case.
Even as many within China seem not to understand how severe this case is and the fact that their money just may be gone, this type of scam sadly is not new to the country. There have been several other instances of this same kind of case where new investors pay incoming fees to keep money going back to loyal customers to keep them investing. On the surface, it appears like every one is sharing in the profits, but this is only done to keep money coming in.
A company called Ezubao used a similar set up to scam 900,000 investors. The site designer, Ding Ning, collected $ 9 billion in fraudulent funds. He was arrested and is now serving life in prison for stealing billions from so many investors.
Between just these two cases, almost 201 million end users on the mainland of China lost close to $ 20 billion in investments. This is devastating for many who saw this as a last-ditch effort to improve pretty dismal situations. The pending charges for the second arrest have not been announced but many speculate he will also face life in prison.
Police in China have made numerous announcements about the dangers of online investing, but it seems many in China are not getting the message. Ezubao should have been enough to keep the Chinese out of online investing, but many were ready to jump on the next bandwagon to make a profit. There are some that question why citizens in China are so quickly lead into a cult-like following for something as serious as an investment scam so easily.
The post JUST IN: 200 Million People FLEECED, Massive Scheme Exposed As $ 11 Billion Gone appeared first on Conservative Daily Post.