Former police colonel in Nghe An infiltrated a multi-level marketing network to raise capital.

This form of fraud is not new.

More than 4 months ago, Nghe An Newspaper hadA series of articles reflecting on multi-level capital mobilization models in the 4.0 era, which mentioned Lion Group. Immediately after the article, the authorities issued a warning document, even strictly prohibiting teachers from participating in this model.

However, despite the warning, many people rushed to invest, even secretly borrowing money from their families to invest here. Especially teachers. After the warning, many people went on social networks to proudly claim to be members of Lion Group and affirmed that this is not a multi-level model.

According to the advertisement, this form of investment is initiated and operated by Lion Group Financial Institution. With just a minimum investment of 1,000 USD, "investors" can get rich quickly without doing anything, so many people have jumped in.

“Many people joined this network. They invited me too, so I decided to infiltrate to expose the fraudulent nature of this multi-level capital mobilization form,” Colonel Ho Ba Vo (63 years old, Vinh City), told a reporter from Nghe An Newspaper.

Lion Group in Nghe An regularly organizes meetings to attract participants. Photo: TH

Before retiring 5 years ago, Mr. Vo was a senior investigator, Deputy Chief of the Investigation Police Department, Nghe An Provincial Police. As an experienced investigator, it did not take Mr. Vo long to infiltrate this network. He used his pension to invest in a branch of this organization as a member.

After a period of penetration, Mr. Vo concluded that this was not a new form of fraud, tightly organized in each "chain" in which participants would be called "investors". Each investor would be given an account to deposit money into. The "expert panel" were the ones who directly operated and controlled the system.

Investors will create an account on the system to deposit money (converted to USD), then create another account to trade on the foreign exchange market through the Fx trading markets exchange. The investors' money will be traded by a "team of experts" with a commitment to earn a minimum profit of 22% of the invested amount. Investors lose 1.2% of the total investment amount for the activities of the operating experts. Those who introduce others to open an account will receive a trading commission based on the assets and trading volume. The more assets traded, the higher the commission.

A Lion Group seminar in Nghe An attracted a lot of attendees. Photo: TH

"Lion Group does not do any business to create products, but only uses the trick of taking money from later investors to pay high interest rates to earlier investors. In Vietnam, there are about 44,000-55,000 people participating in this system, of which about 95% of investors lose everything, only 5% make money, even a lot of money," Colonel Ho Ba Vo informed.

According to Mr. Vo, the 5% of people who receive money are experts or "ringleaders" because this is the group of people who can manipulate and regulate the amount of money in the investor system using algorithms to transfer to commercial banks, withdraw and share with each other. However, the method of transferring money from Lion Group's system to commercial banks is still a mystery that cannot be clarified.

Difficult to handle criminally

"According to my personal investigation and verification, the "ring" heads connected to the bookie between 10pm and 4am the next morning. This proves that the server operating the system is located abroad. On the other hand, when level 1 "investors" lose money, they do not know who has appropriated it, so it is difficult to have evidence to denounce this type of fraud," said Mr. Vo.

According to the former Deputy Head of the Investigation Police Agency, fighting and handling this organization is a very difficult problem for law enforcement agencies. Therefore, the State Bank and the police agency can only issue notices to inform people not to deposit money into this multi-level capital mobilization line, but cannot handle it criminally.

"Propaganda to help people correctly identify the nature of this form of multi-level capital mobilization, not to participate, not to assist, and not to entice others to participate is extremely important and necessary in this context," Mr. Ho Ba Vo suggested.

The trick of "doing charity" to create trust, approach and attract customers. Photo: TH

Because they have not been able to handle the case criminally, the Lion Group's henchmen are still openly luring people to invest here. These people often buy expensive cars in installments to show off, to attract greedy people to mobilize deposits. On the hood of the car, members have a picture of a lion's head to identify the brand. They also often "do charity" by giving gifts to people in difficult areas, flood areas... Giving gifts to schools with the aim of approaching and attracting teachers to participate. This charity money is contributed by members in a mandatory form. This is an obligation for this organization to continue to exist and advertise itself. "They often post information about members buying expensive assets on social networks to attract and even organize public seminars to attract members," said Mr. Vo.

The State Bank of Vietnam affirms,Lion Group is a self-proclaimed organization that conducts illegal multi-level capital mobilization activities.However, it is very difficult for the authorities to handle because the server is located abroad, moreover, when players lose money, they do not know who took it. And the winners also have difficulty knowing who got it, so the losers have no evidence to report this type of fraud.

Police in some localities have issued warnings to people about the Lion Group organization. According to the police, once it fails to attract new investors, the Lion Group's network of operations will collapse when there is not enough money to pay, investors will lose all their money. Participants will not be protected by the law and are at risk of losing money and having their personal data leaked. In the Central region, Lion Group has developed in some localities, hiding under names such as: "financial investment community", "business 4.0"... operating vigorously on Facebook, Zalo... showing signs of abnormality in mobilizing and trading foreign exchange. The police recommend that agencies, units, cadres, employees, workers and people be vigilant against unusual, illegal financial business activities with many risks; do not be lured, enticed to participate, causing disturbances to security and order...