Financial freedom? MLM nightmare—— The beginning and end of the "Meitemei" online pyramid scheme case in Henan

From the dream of achieving financial freedom with just one mobile phone to being chased by dozens of relatives and friends for debt... Recently, Wang Moulin, who was released on bail and awaiting trial in Huixian City, Xinxiang City, Henan Province, recalled his personal experience of the nightmare of pyramid schemes to reporters.

In May 2023, according to the command and deployment of the Ministry of Public Security, local public security organs launched a centralized crackdown on the pyramid scheme case of "Meitemei" shopping mall in Henan. 22000 people participated, covering dozens of provinces, regions, and cities across the country, with over 160000 registered accounts and a total level of 131. The amount involved in the case reached as high as 4.5 billion yuan... Over the past two years, how has this online pyramid scheme organization achieved "viral" dissemination and reproduction? What are the new characteristics of online pyramid schemes and how can they be effectively cracked down on? Xinhua News Agency reporters conducted an in-depth investigation into this matter.

Can a mobile phone achieve financial freedom?

At that time, Wang Moulin, who had just resigned from an insurance company, was brought to a promotional event by a friend.

"It's not a problem to earn an extra few thousand to hundreds of thousands of yuan per month. With a mobile phone, financial freedom can be achieved and life dreams can be realized." "Buy and buy, sell and sell, three minutes a day, making money is very easy!"... Organizer Fan Mouhua stood in the center of the stage, talking confidently about the "way to get rich". The people below, their eyes lit up.

Despite having several years of experience in the insurance industry, Wang Moulin still paid a membership fee of 200 yuan and joined the "Meitemei" store.

The picture shows the "slogan" falsely promoted by the "Meitemei" mall to attract people to join. Provided by the Public Security Bureau of Huixian City, Henan Province

Afterwards, Wang Moulin began to "buy and sell" a type of hawthorn wine in the mall, purchasing goods ranging from 3000, 5000, and 10000 yuan each time, once every 3 or 9 days. According to the rules, a payment of 10000 yuan will automatically turn into 11500 yuan after 15 days, which means that traders can receive 15% static returns every two weeks, of which 1% will be submitted to the trading platform.

If you want to break even, you need to maintain a frequency of trading at least once every three days and continuously invest funds into it. Within 90 days of registration, at least 3 people must be recommended to join, otherwise only 60% of the revenue can be earned, and the rest will be converted into platform points.

"In the end, all the money was frozen inside and could not be withdrawn. When it was said to be making money, there would never be any money in hand, and it was impossible to withdraw completely." When Wang Moulin woke up, he had already invested over 100000 yuan and was deeply trapped in it.

Yang Mouyong, a 50 year old elementary school math teacher in Huixian City, also failed to settle this account. He invested a total of 500000 yuan into the platform by swiping credit cards and seeking bank loans, but ultimately lost everything.

"I can't control how much I need to invest to recoup my profits; I don't know how much the MLM leader has in mind; I can't predict when the platform won't run; I can't control when it will crash and run away." After more than a year of joining the platform, Yang Mouyong's hair turned white.

A mall is a facade, and goods are also a facade

In May 2021, the public security organs of Xinxiang City discovered that the operation of Xinxiang Meitemei Trading Co., Ltd. was abnormal and suspected of illegal activities. Under the guidance of the Henan Provincial Public Security Department, the public security organs at the two levels of Xinxiang City and Huixian City quickly established special task forces to conduct investigations.

After investigation, Fan Mouhua, who has a criminal record of pyramid selling, registered and established Xinxiang Meitemei Commerce and Trade Co., Ltd. and Henan Meitemei Industrial Development Group Co., Ltd., first built a "Meitemei" mall through the Internet, and then renamed it "Zhongxin Contract Mall", claiming to be the "pioneer of reverse profit business system" for operation.

The picture is a promotional brochure made by the "Meitemei" shopping mall to further expand publicity and defraud property. Provided by the Public Security Bureau of Huixian City, Henan Province

Offline, organize collective training, national tour lectures, investment fairs, etc; Online, through the Internet and WeChat group, the mall is positioned as a subversive innovation and multi integration e-commerce platform that makes money before consumption.

In fact, the cost price of a certain brand of hawthorn wine designated for sale in the "Meitemei" mall is 8 yuan per bottle, and the factory price is 14 yuan per bottle, while the mall is priced at 250 yuan per bottle. The actual purchase volume of "Meitemei" company from the hawthorn wine production company was 86000 bottles, and platform data shows that as of the incident, "Meitemei" mall sold a total of 54 million bottles.

The mall is a facade, and the goods are also a facade, not actually produced and sold. They are used to conceal the essence of mutual aid funds and the truth that they are actually pyramid schemes.

"They use the number of development personnel and investment amount as the basis for calculating rewards and rebates, luring participants to continue developing others to participate." Song Feng, the captain of the Economic Investigation Brigade of Huixian Public Security Bureau, said that the "Meitemei" shopping mall involves a new form of online pyramid schemes.

After in-depth investigation by the public security organs, the special task force of police officers overcame difficulties and meticulously sorted out more than 7000 involved accounts and more than 77 million fund flows of the organization. They also audited and fixed the situation of 131 levels of pyramid schemes participants in the organization.

Destroy pyramid schemes throughout the entire chain

In May 2023, the Ministry of Public Security will deploy the national public security organs to collect the network, arrest the suspect involved in the case nationwide, and realize the full chain attack on the pyramid selling organization from the backbone to the R&D, operation and maintenance personnel. So far, the public security organs have arrested more than 200 suspect.

The picture shows the scene where the police obtained a full amount of backend data from "Meitemei". Provided by the Public Security Bureau of Huixian City, Henan Province

The investigation by the public security organs found that Fan Mouhua has been engaged in illegal pyramid schemes for a long time. Despite being investigated and cracked down on multiple times by the public security and industry and commerce departments, he still does not repent. He gathered family members to organize the "Meitemei" pyramid scheme gang, using the guise of an "online shopping mall" to develop personnel and illegally collect funds to maintain operations, and achieve the goal of defrauding money.

"People at the top of the pyramid of pyramid selling organizations constantly" cut leeks "at the participants at the bottom of the tower, and money flows in this plate." Chen Jiale, a police officer from the Economic Investigation Brigade of Huixian Public Security Bureau, said that distributing the funds of new participants as profits to the initial participants, in order to attract more people to participate, is a "Ponzi scheme" that changes soup but not medicine.

In recent years, online pyramid schemes have gradually replaced the traditional pyramid schemes, which are characterized by the establishment of pyramid style and multi-level publicity and marketing channels with the Internet as the carrier. The relevant person in charge of the Pyramid Selling Crime Investigation Department of the Economic Crime Investigation Bureau of the Ministry of Public Security stated that this new type of pyramid selling method often uses the name of "e-commerce" and introduces concepts such as "micro marketing" and "online direct sales", claiming high profits and returns, "greater deception, stronger concealment, faster development speed, and wider range of harm".

The picture shows police officers from the Economic Investigation Brigade of Huixian City Public Security Bureau escorting suspects for execution. Provided by the Public Security Bureau of Huixian City, Henan Province

How to crack down on such cases? Qu Haiwei, Political Commissar of the Henan Provincial Public Security Department's Interested Crime Investigation Team, introduced that in the process of solving the "Meitemei" pyramid scheme case in the mall, the police started from clues to dig and investigate, penetrating the source of funds upwards, digging deeper into the criminal chain downwards, and expanding the criminal network in parallel, in order to comprehensively investigate the pyramid scheme organization and lock in core personnel.

In order to further curb the spread of online pyramid schemes, the Ministry of Public Security has recently deployed national public security organs to carry out a concentrated crackdown on online pyramid schemes, with a focus on cracking down on new types of online pyramid schemes, cross-border pyramid schemes and other pyramid schemes related to major livelihood issues and under the banner of major policies.

The relevant person in charge of the Economic Crime Investigation Bureau of the Ministry of Public Security stated that the public security organs will further innovate their thinking and improve their capabilities, vigorously crack down on illegal fundraising, pyramid schemes and other related economic crimes, and resolutely protect the "money bags" of the people.

No matter what kind of gimmicks or guises are used, the essence of pyramid schemes, such as "pulling people's heads" and "Ponzi schemes," cannot be concealed. Illegal pyramid schemes, known as "drumming and spreading flowers", have not generated any actual value. "High rebates" are the principal of "later generations", and the so-called "getting rich" is inevitably just a dream of Nanke. To crack down on illegal activities related to pyramid schemes throughout the entire chain, each department should fulfill their respective responsibilities and work together to combat them. At the same time, efforts should be made to increase publicity and further popularize knowledge on identifying online pyramid schemes; The public should consciously resist pyramid schemes and avoid falling into the trap of pyramid schemes.

Produced domestically by Xinhua News Agency