A sophisticated scam targeting 66,800 people in India has come to an end, with nine Chinese nationals sentenced to prison for their role in defrauding victims of approximately $6 million.
The scam, orchestrated by a gang led by Mr He, whose full name was withheld by authorities, used a fake cryptocurrency investment platform to exploit Indian investors.
The fraudsters not only tricked their victims but also used a complex network of overseas servers, fake identities, and manipulated social media content to conceal their operations.
The fraudulent operation began in May 2023, when He set up an office in Heze, China, and formed a criminal group that preyed on unsuspecting Indian investors.
Source: Pexels
The gang created a fake trading platform, "SENEE," which promised enticing returns of 8% to 15% per month on initial investments as low as 1,000 rupees.
The scammers used chat apps with translation features to communicate in a friendly manner, presenting themselves as seasoned investors offering lucrative opportunities.
Victims were led to believe that the platform was legitimate, with fraudsters posing as affluent Indian investors.
One member of the group, identified only by the surname Li, confessed to posing as a wealthy Indian woman who claimed to have built her fortune through savvy online investments.
She and her accomplices used these fake personas to lure in victims by gaining their trust and promoting their supposed investment expertise.
To further establish credibility, the fraudsters posted fake lifestyle photos on social media, including gym selfies and travel images, to make it appear as though they were successful individuals.
Source: Pexels
The group also used Indian locations for their app settings and created a fake company website with forged business registration certificates and licences, which helped deceive potential investors into believing that the platform was real.
However, once victims deposited larger sums of money, the scammers would suddenly freeze their accounts, making it impossible for them to withdraw any funds.
At this point, the fraudsters had already begun to launder the stolen money through a third-party payment service, converting it into USDT (Tether), a popular stablecoin.
The gang employed a methodical approach to move the stolen funds, converting them into USDT via third-party payment platforms.
This allowed the criminals to obscure the trail of the money, which was later converted into Chinese yuan (RMB) or US dollars.
Source: Pexels
As part of their operation, the gang kept 15% of the stolen money as commission.
The use of USDT, which is widely accepted and easily convertible across major exchanges, made it easier for the scammers to bypass regulatory scrutiny and launder the proceeds of their crimes.
The Chinese authorities' ability to track this illicit flow of funds was crucial in dismantling the operation.
While cryptocurrency transactions often offer anonymity, coordinated efforts between domestic law enforcement and international agencies eventually brought the criminal gang to justice.
The People’s Court of Heze Economic Development Zone sentenced all nine members of the gang to prison terms ranging from five to nearly 15 years.
In addition to their jail sentences, they were also fined for their involvement in the scam.
Source: Baidu
The judge noted that while this particular scam targeted Indian citizens, similar frauds are becoming increasingly common in China as well.
The judge said,
"The fraudulent activities in this case highlight the growing threat of online scams that prey on vulnerable individuals."
The court also issued a public warning to individuals not to trust investment schemes promising unusually high returns, insider tips, or cashback offers, as these are typical signs of a scam.
Authorities have urged people to be cautious when approached with "too good to be true" opportunities, especially those related to online or cryptocurrency investments.
This case is part of China's broader crackdown on telecom and internet-based fraud, particularly scams involving digital currencies like USDT.
As scams targeting foreign nationals continue to rise, Chinese authorities are focusing on tightening their control over fraudulent activities that extend beyond their borders but rely on domestic infrastructure.
Tracking international online scams becomes far more difficult when cryptocurrencies and decentralised networks are involved, as they offer a level of anonymity that makes investigations harder to follow.
The Chinese court also made an appeal for other members of the scam ring who may still be at large to come forward voluntarily, offering lighter sentences for those who surrender in accordance with current laws.
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