Prevent illegal fundraising and promote social harmony.

Comprehensively and deeply promote the publicity and education work of preventing illegal fundraising in our city, to protect the vital interests of the masses and maintain social stability as the starting point, further enhance the public's risk awareness and prevention capabilities, reduce the occurrence of illegal fundraising cases, and create a good economic and social development environment. Through the continuous and in-depth development of publicity and education activities, promote the linkage and cooperation among various regions and departments in the city, and establish a long-term mechanism for publicity and education to prevent illegal fundraising.
 

     Definition and basic characteristics of illegal fundraising

Illegal fundraising is the act of illegally absorbing funds from the public (including units and individuals) in violation of national financial management laws. Illegal fundraising must simultaneously possess four characteristics: illegality, publicity, inducement, and sociality.
 

     Legal responsibilities of illegal fundraisers

In China's Criminal Law, illegal fundraising constitutes corresponding crimes based on different specific circumstances such as subjective attitude, behavior mode, and harmful results, among which the most important are Article 176 on the crime of illegally absorbing public deposits and Article 192 on the crime of fundraising fraud.
 

   Participating in illegal fundraising, the law does not protect, and the government does not pay.

According to China's laws and regulations, losses incurred from participating in illegal fundraising activities shall be borne by the participants themselves, and the debts and risks formed cannot be transferred to any other units that did not participate in the illegal fundraising activities.
 

     Be cautious about working for unregulated financial companies; being a salesperson also carries risks.

According to the "Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Illegal Fundraising" issued by the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security, providing assistance to others in illegally absorbing funds from the public and collecting agency fees, benefits, rebates, commissions, and other fees constitutes joint crime of illegal fundraising and shall be held criminally liable according to law.
 

     Main forms of illegal fundraising

1. Illegal fundraising under the guise of planting, breeding, project development, estate development, ecological and environmental protection investment, etc.

2. Illegal fundraising under the guise of issuing or disguised issuing stocks, bonds, lottery tickets, investment funds, etc., or under the guise of futures trading and pawning.
3. Illegal fundraising through claiming shares and dividend distribution.

4. Illegal fundraising through membership cards, membership certificates, seat certificates, discount cards, and consumption cards.

5. Illegal fundraising through product sales with rental returns, repurchase and transfer, developing members, merchant alliances, and "quick points method".

6. Illegal fundraising through "virtual" products constructed using modern electronic network technology, such as "electronic shops," "electronic department stores" investment entrusted operations, and maturity repurchase.

7. Illegal fundraising by equally dividing assets such as property and real estate and selling the disposal rights of their shares.

8. Illegal fundraising in the form of establishing investment funds via the internet.

9. Illegal fundraising in the form of "electronic gold investment."
 

     Four common methods of illegal fundraising

First, promise high returns.

Second, fabricate false projects.

Third, create hype through false publicity.

Fourth, use emotional manipulation.
 

   Typical illegal fundraising activities "four steps"

Step one: Make promises. Illegal fundraisers will weave one or more projects that are as "grand" as possible. They generally exaggerate the "promise" to attract participants' attention.

Step two: Build momentum. Use all resources to create a large scale.

Step three: Absorb funds. Find ways to extract money from your pockets.

Step four: Run away. Illegal fundraisers often run away after a period of "absorbing funds," either because it was originally a "Ponzi scheme" and they disappear, or due to poor management leading to a broken capital chain.
 

   Common tricks of illegal fundraising

Illegal fundraising criminals use various means to lure the public into being deceived to achieve their illegal fundraising goals.

1. Decorate the company facade to create a false sense of strength.

2. Fabricate investment projects to dispel public doubts.

3. Confuse investment concepts, making it difficult for ordinary people to judge.

4. Promise high returns and fabricate "wealth" myths.
 

     How to prevent illegal fundraising

If you encounter the following situations when raising funds from the public, be sure to be vigilant:

1. Using "watching advertisements, earning extra money" or "consumer rebates" as a pretext;

2. Using overseas investment equity, options, foreign exchange, precious metals, etc. as a pretext;

3. Using investment in the elderly care industry to promise high returns or "free" elderly care, "housing" elderly care, etc. as a pretext;

4. Using private equity investment, partnership business as a pretext, but not registering the business with the industry and commerce department;

5. Using investment in virtual currencies, blockchain, etc. as a pretext;

6. Using "poverty alleviation," "mutual assistance," "charity," "film and culture," etc. as a pretext;

7. Distributing investment and financial management advertisements in streets, malls, supermarkets, etc.;

8. Attracting elderly people through organizing inspections, tours, lectures, etc.;

9. "Investment, financial management" companies, websites, and servers located overseas;

10. Requiring investment payments in cash or to personal accounts or overseas accounts.
 

     "Three musts and three must nots" to avoid illegal fundraising traps

First, be rational, do not rely on luck.

Second, be steady, do not take risks.

Third, be vigilant, do not be blind.
 

June 18, 2020