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Imagine investing millions of yuan into a seemingly promising financing app, only to find out that the only return you can get is beef. This bizarre and shocking situation unfolded in Shanghai, leaving unsuspecting investors in utter disbelief.
The Deceptive Cattle-Raising Scheme
Police in Shanghai's Xuhui district recently revealed a shocking case of illegal fundraising that has left thousands of investors in a state of shock. A four-member gang, who claimed to operate cattle farms overseas and import beef into China, managed to collect a staggering 500 million yuan (US$70 million) from unsuspecting investors over the past eight years. The gang was arrested in November last year and charged with illegal fundraising.
The Alluring Investment Opportunity
One of the victims, a woman surnamed Wu, was lured into the scheme after visiting the app's offline store in a high-end shopping area. The app, named "Xuan Min Yang Niu," which translates to "All People Raising Cattle," promised an annual return rate of 12 per cent. Wu invested a total of 100,000 yuan (US$14,000) in the project, believing in the app's legitimacy. However, when she tried to withdraw her investment last year, she was told that the only return she could get was beef. Alternatively, she could try to sell it on their platform for cash. "The boss of the app said he did nothing wrong. We should bear the responsibility by ourselves," Wu was quoted as saying.
The Victims' Dilemma
Another victim, a man known as Fan, invested one million yuan (US$140,000). "They said they could give me beef worth one million yuan. How can I accept this? How can I eat so much beef?" he asked. A third victim, surnamed Hu, pumped three million yuan into the scheme and even recommended it to his friends. Upon discovering that he could only get a beef return on his investment, Hu said, "What can I do with all that beef? Shall I sell it at the wet market? I do not have a licence to sell beef."
The Con Artists' Tactics
According to police, the racketeers paid overseas cattle farms to allow them to install cameras to send cattle videos to their potential investors, boosting their trust. However, the beef they sold was not imported but bought from domestic wholesale markets. "While they could not make profits from selling beef, they sucked up more funds from new investors to pay for the principals and interests of previous investors," an officer surnamed Liu told the media. "They operated the con in this way until their capital chain broke."
The Aftermath
About 10,000 individuals invested in the scheme, with 2,000 of them still waiting to receive their funds, totalling 40 million yuan (US$6 million). The head of the gang, identified with the surname Zhang, refused to admit committing the crime, claiming that the scheme was a business innovation. "I thought of creating a new business model through the internet," said Zhang. "I copied those internet companies that subsidised customers at their early stage to expand the company's scale and ultimately ended up listing. I did not expect it to be so difficult to succeed," he added.
A Cautionary Tale for Investors
This shocking case serves as a stark reminder for investors to be cautious and vigilant when considering investment opportunities. Always do thorough research and verify the legitimacy of any investment scheme before committing your hard-earned money. If it sounds too good to be true, it probably is. Stay informed, stay cautious, and protect your investments from falling into the hands of unscrupulous con artists.
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Editor: Crystal H
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