Chinese police arrest 36 in connection with US$290,000 online stock trading and advice scam operation

  • Scammers would charge investors for place in fake trader WeChat network
  • Victims would lose money and be pressed by other ‘investors’ to buy more
PUBLISHED : Monday, 17 December, 2018, 1:54pm
UPDATED : Monday, 17 December, 2018, 11:27pm

Chongqing police arrested 36 people in connection with an online fraud operation designed to lure would-be investors with useless share trading advice.

The group scammed more than 2 million yuan (US$290,000) from about 100 people, news site said on Sunday.

Its targets were mostly from other provinces, so the scammers thought they would evade police. The victims’ nationalities were not known.

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Police said none of the suspects had stock trading or market analysis skills. The youngest suspect was 18, and members earned a base salary of 3,000 yuan a month on top of 50 yuan commission each time they duped a victim.

Police launched an investigation in August and found that the ringleader of the group had set up a company registered in Foshan, Guangdong, with several others, using internet chat groups to contact and defraud investors.

One male victim had paid 1,680 yuan to join a WeChat insiders’ discussion group for trading shares, which was specifically set up to swindle him. He did not know that all of the other members were fraudsters. Victims typically paid between 1,280 and 1,680 yuan to join a chat group.

Members would pretend to be share traders and financial experts, gain the trust of victims and recommend “bull stocks” for them to buy, police said.

When the victims lost money, the scam operators would blame market instability and seek further investments in their scam from the investor.

“For every victim, they would make another group of about 40 or 50 people pretending to have lost money on the stock market as well,” a police source was quoted as saying.

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“But in these groups only one person was a genuine stock market investor, the rest were scammers. The scammers would make several fake WeChat groups like this with different people in each group.”