Nghe An: Proposal to prosecute illegal multi-level activities and capital mobilization fraud

Proposal for criminal prosecution

Nghe An Department of Industry and Trade has just sent a document to the Provincial Police, Market Management Department and People's Committees of districts, cities and towns regarding strengthening inspection and prevention of illegal multi-level marketing activities.

According to the Department of Industry and Trade, recently, the press and people have reported that some businesses, organizations and individuals use social networks and websites toMulti-level fundraising, aiming to make illegal profits such as Cowd1 project, MyAladinzs, WinsBank, Lion Group... with the trick of enticing participants to deposit money into the system on electronic exchanges to receive daily interest with an interest rate of 0.8-1%, or 290 - 365%/year.

Illegal multi-level marketing brazenly organized a seminar with more than 2,000 people in a large hotel in Vinh City amid the complicated developments of the epidemic. Photo: TH

Meanwhile, the world's leading financial investors such as Buffett's Berkshire Hathaway and George Soros's Quantum Fund have the highest annual profits of only about 20% - 30%. To pay the above interest rates to participants, these systems can only operate according to the Ponzi model, that is, taking money from later people and paying it to earlier people. This group will stop operating when it has a large enough amount of money from the participants.

In addition, according to the document of the Department of Industry and Trade of Nghe An, recently there has been the appearance of an unlicensed multi-level marketing system Jeunesse, which has lured people to sell products to cure cancer, gout, etc., advertised as completely curing diseases. These business systems are present in Vinh city and neighboring areas as well as have infiltrated remote districts. Jeunesse is the illegal multi-level marketing group that Nghe An Newspaper has just reported.investigative seriesafter long time penetration.

Jeunesse business system is bustling to attract customers in Nghe An. Photo: TH

To prevent the above situation, the Department of Industry and Trade requested the Provincial Police to strengthen coordination with state management agencies on multi-level marketing activities in the province. Timely conduct inspection and supervision activities, deploy professional measures to grasp the situation, carry out the fight, prosecute illegal multi-level marketing activities and activities that take advantage of the multi-level marketing model to carry out illegal financial mobilization activities, fraud, and appropriation of assets of organizations and people participating in multi-level marketing in the province. Strengthen state management of network security in multi-level marketing activities in Nghe An province.

Propose that the Market Management Department strengthen inspection, examination, supervision and handling of illegal multi-level marketing activities and activities that take advantage of social networking sites and e-commerce platforms to illegally mobilize finance. Organize training and professional training for officials and civil servants directly performing state management of multi-level marketing. Disseminate and propagate laws on multi-level marketing management to businesses and multi-level marketing participants.

The Department of Industry and Trade also requested the Department's Inspectorate to strengthen the organization of specialized and surprise inspections of multi-level marketing activities to prevent organizations, businesses and individuals from illegally organizing multi-level marketing in the province. The People's Committees of districts, cities and towns direct departments, offices and wards, communes and towns to strengthen propaganda and warnings to each citizen about the above-mentioned illegal multi-level marketing activities to promptly combat and prevent organizations and individuals from taking advantage of the multi-level marketing model to commit fraud. Strengthen the direction of local authorities to proactively coordinate with relevant superior agencies to inspect, check and supervise in order to promptly detect illegal and disguised multi-level marketing activities in the management area and report to competent authorities to handle violations according to regulations....

Portrait of Lion Group leader. Photo: TH

Lion Group's risk of collapse

According to the investigation of Nghe An Newspaper reporters, for many months now, thousands of Lion Group investors have been “crying out” because they cannot liquidate. If a year ago, social networks were still full of posts and groups created to praise Lion Group and its leaders, now there are also many posts and groups created to denounce Lion Group as a scam. The group “Exposing the Fraudulent Face of Lion Group” on Facebook alone has nearly 10,000 members. Among them, many people are calling for filing a complaint to the police.

An investor in Vinh City who asked to remain anonymous said that liquidity has been stagnant since the end of 2020. The few that are still liquid are simply because the team is still attracting new investors. The remaining 90% of investors are currently not liquid. Meanwhile, Lion Group has about 60,000 investors.

Lion Group's model is a mix of multi-level marketing, forex, virtual currency... By agreeing to participate, investors will be able to create an account to deposit and withdraw money (minimum deposit of 1,000 USD) and a forex account on the Fxtradingmarkets platform, then just sit back and enjoy the benefits, the platform's experts will trade to help investors earn 0.8 - 1%/day, with a regular commitment of 22 - 30%/month. Although the signs of fraud are very clear, with the bait of high profits, Lion Group still makes thousands of investors fall into the trap.

Lion Group regularly organizes meetings to attract participants. Photo: HT

According to this investor, for more than 2 years now, tens of thousands of people have invested in the fxtradingmarket system, which was built by the head of multi-level marketing expert Iker Phuong, but was advertised as an international trading floor. “Previously, a package of 1,000 USD was exchanged for 1,000 FXT coins, so 1 FXT coin = 1 USD. But now, when the system is too big, the base of the pyramid has swelled too much. Paying interest and commissions fairly is impossible, when there are fewer new investors entering the system. And the leaders who stay rooted to earn commissions are too big,” said this investor, adding that Iker Phuong (Ho Ngoc Phuong) has come up with a perfect way to escape. That is to turn the meaningless FXT coin that anyone who knows how to write software can create, into an FXT token, then spend a little money to link with some typical exchanges like bilaxy to put it on the exchange. Then ask investors to put it on the exchange for liquidity themselves.

A group of key leaders of Lion Group. Photo: Contributor

However, if investors previously bought 1 FXT coin for 23,700 VND, now it is only sold for ~ 0.15 USD, equivalent to more than 3,000 VND. Thus, investors have lost up to 85% of their investment. “But that's not all, anyone who knows about blockchain will understand. If the FXT coin on the Fxtradingmarket (FXTM) exchange is a real cryptocurrency, then as long as there is a receiving wallet on the Bilaxy exchange, FXT can be transferred from the exchange to Bilaxy in seconds. But why does Iker Phuong require transferring to the trust wallet first and then from the trust wallet to Bilaxy? But some people transfer for ten days and it still hasn't reached their wallet. And the majority of investors can't transfer, but have to ask the leader to transfer. Because simply, the FXT coin on FXTM has no value and is not an FXT token on Bilaxy. And the few people who can transfer from FXTM to trust are actually leaders loyal to Iker. When there is a transfer order, Iker's technical team will manually approve a very small number. Then, the FXT token on the bilaxy exchange is pumped into the trust wallet of that approved person. Therefore, some investors can transfer from trust to bilaxy. But the FXT in FXTM cannot be transferred. "Okay," an investor is at risk of losing more than 500 million VND, analyzed.

Nghe An is one of the localities with the largest number of investors in Lion Group. Photo: TH

A few months ago, leaders were still trying to reassure investors that FXT would rise to $1 again. But after a period of promise, the price is still stuck at $0.15/1 FXT. “Investors are all old people, if there is any knowledge, most of them are leaders, knowing but trying to hide it. What kind of international exchange is it that 90% of the traffic and investors come from Vietnam. In fact, it is all a trick to prolong the time until investors get discouraged and gradually disband. If we let it collapse now, they will still be enthusiastic and focus on suing Lion Group,” this person added.

The State Bank of Vietnam confirmed that Lion Group is a self-proclaimed organization, operating illegal multi-level capital mobilization activities.

Meanwhile, the police in some localities have issued warnings to the people about this organization. According to the police, once it fails to attract new investors, the Lion Group's network of operations will collapse when it does not have enough money to pay, and investors will lose all their money. The police recommend that agencies, units, officials, employees, workers and people be vigilant against unusual, illegal and risky financial business activities; do not be lured or enticed to participate, causing insecurity and disorder...