In the city of Haining, Zhejiang Province of China, a case of fraudulent “group buying and gambling on stones” scheme has recently surfaced. The scam group utilized a live-streaming app to create private live rooms, enticing victims with low-price group buying and high rebates, while setting up traps involving stone gambling, ultimately illicitly making over 5 million RMB.
According to a report from the state-owned media CCTV News on June 3rd, a victim named Xiao Chen came across an advertisement promoted by the fraudulent group online. The ad claimed that by screenshotting and drawing five consecutive numbers, one could receive a free jade pendant. Xiao Chen tried it out and indeed drew five consecutive numbers, prompting him to add the customer service.
Subsequently, under the guise of claiming the jade welfare, the other party guided Xiao Chen to enter a web live room where gambling on stones was happening through the “Pinxianghui” mini-program link. Xiao Chen spent 58 RMB for a try, and shortly after making the payment, the web host claimed that the original stone had “turned green” after cutting (indicating high-quality jade with good water head, beautiful color, and fewer cracks, valued much higher than the cost of buying the original stone). Xiao Chen received a rebate of 200 RMB.
Later on, the live room introduced a bigger bait called “Five consecutive cuts”. If all 5 stones were all “cut down”, meaning none of them revealed high-quality jade, the participant could receive a tenfold reimbursement of the principal. However, if just one stone was “turned green”, the principal could not be returned.
Xiao Chen went on to spend over 10,000 RMB participating in the “Five consecutive cuts” scheme. In one instance where he bet 500 RMB, and it turned out to be “turned green”, Xiao Chen received 1800 RMB in cashback, but the remaining over 9,000 RMB of the principal were all lost. Sensing that something was amiss, Xiao Chen reported the incident to the authorities.
Upon investigation, it was found that the live room’s host, buyers, and audience were actually all members of the fraudulent group pretending to be regular participants. “Out of 30 participants, 29 were collaborators”. This group manipulated the outcomes of “turned green” and “cut down”, using the lure of “tenfold reimbursement” to harvest the victims’ principal. In reality, the stones used were mostly ordinary rocks, and whether the original stone could yield high-value jade or be acquired at a high price were all fake scenarios scripted by the criminal group. The goal was to entice victims into increasing their investments, and once substantial funds were in place, they would execute the scam, a typical “small losses, big gains” fraud model.
Reportedly, in April of this year, the mastermind of this criminal group, a person named Zhu, was sentenced to 12 years in prison for fraud, deprived of political rights for 1 year, and fined 300,000 RMB, while other accomplices received varying sentences.
Xiao Chen’s experience is not an isolated case. In a similar live streamed stone gambling scam in Shanghai, several elderly individuals were defrauded, with Mr. Li, a man in his seventies, falling victim to a scam involving amounts exceeding 1.3 million RMB.