Suspects held for tricking senior citizens with fake stocks

The suspects allegedly sold health products to senior citizens with free "stocks" which didn't exist – most victims were enticed to buy the products due to the free stocks.

Twelve suspects have been detained for allegedly selling health products to senior citizens with free "stocks" that didn’t exist, Shanghai police said on Friday.

Police said most of the victims were enticed into buying the products because of the stocks.

At least 1,000 people were sucked into the scam, with Shanghai victims losing about 2 million yuan (US$320,000) in total.

Police in Putuo District started their investigation in December last year when a woman living in Caoyang subdistrict reported losing about 21,000 yuan to the scammers.

The woman, surnamed Xu, said she signed a stock holding contract with a local biotech company which sold her health products and bestowed stocks of “AliHealth,” supposedly listed in Hong Kong, and those of an unheard-of company.

Putuo police

Copies of the stock holding contracts signed between the company "Leibang" and the victims.

Xu grew suspicious about the contract after a few months when she received no dividends from stock rises and the company staff who sold the products to her went out of touch.

She said she signed the contract at a promotional event held by the company, “Leibang,” at a hotel on Zaoyang Road.

Police said they confirmed that AliHealth has nothing to do with the scam.

The legal representative of “Leibang," a man surnamed Wang, was caught in Hongkou District later in December, while the rest of the suspects, including those who allegedly devised the scheme, were netted later.

A man surnamed Li who runs a company called “Juling” in Shandong Province allegedly provided Wang with the products, and also organized training sessions for sales outlets like “Leibang” around the country.

The suspects admitted that the free AliHealth stocks were faked, police said.

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