Today’s Focus: The Chinese Communist Party Backs Telefraud Groups, Swindling $5 Billion from the U.S. Annually; Chinese Engineer Pleads Guilty to Stealing U.S. High-End Military Technology; How Terrifying is the Economic Winter in Mainland China? Another Private Entrepreneur Plunges to Death.
Recently, a special committee in the U.S. Congress stated that Asian fraud groups secretly supported by the Chinese government swindle over $5 billion annually from Americans.
The U.S.-China Economic and Security Review Commission (USCC) revealed in its latest report that, according to conservative estimates, in 2024, instances of online fraud targeting Americans increased by 42% compared to the previous year.
In March 2024, an 82-year-old man named Dennis from Virginia, U.S., met a woman named “Jessie” on Facebook. After months of communication, they developed a close relationship. Jessie claimed to have made a lot of money investing in cryptocurrency and convinced Dennis to invest his life savings in it. Subsequently, Dennis’s money disappeared along with Jessie. Upon discovering he had been conned out of all his savings by his online love interest, Dennis chose to end his life.
Such scams are not uncommon. An expert group convened by the U.S. Institute for Peace estimated that nearly $64 billion was swindled globally in 2023 alone. Countries like Myanmar, Cambodia, and Laos are primary hubs for fraudulent activities.
Notably, the U.S. congressional report pointed out the involvement of the Chinese Communist Party behind these fraud groups.
According to Chinese government documents, when Chinese security forces participate in cracking down on fraud centers in Southeast Asian countries, they confiscate the equipment used by fraudsters. For example, in 2023, China participated in several operations in Laos and seized at least 640 computers and mobile phones used by scammers. In August 2024, China joined the crackdown in Myanmar, also seizing a large number of devices used by fraudsters and transporting them back to China.
U.S. authorities indicated that these seized devices may hold a wealth of sensitive information of American victims, but China consistently refuses to share the information collected from these devices with other countries.
The USCC report stated that when cracking down on fraud centers, Beijing takes action against criminal groups that do not adhere to CCP control, while turning a blind eye to those aligned with the CCP. This selective crackdown allows criminal groups to conclude that as long as they heed CCP directives, they can reap higher profits with lower risks.
The report mentioned that initially, these Chinese criminal groups targeted victims within China, but lately, under CCP influence, they have expanded their focus to English-speaking countries, including the U.S.
What’s more concerning is that these fraud groups invest significant funds in China’s Belt and Road Initiative, participating in infrastructure construction across multiple Southeast Asian countries, thereby establishing comprehensive fraud bases in these regions. These criminal groups employ advanced technology to lure victims using various methods while minimizing the risk of being traced. Moreover, they utilize AI technology, translators, encrypted messages, and tools to circumvent barriers based on appearance and language, expanding their fraud operations globally. Furthermore, these criminal groups can transfer stolen assets to thousands of digital wallets and launder money into legitimate economic sectors.
The report warned that unless the U.S. takes countermeasures and increases public awareness against fraud, such scams will only escalate. Additionally, these fraud groups are becoming more technologically advanced, and their fraudulent methods are becoming more concealed, making it challenging for ordinary citizens to guard against them.
Experts recommend that everyone remains vigilant and skeptical of keywords like “investment,” “cryptocurrency,” and “quick earnings” on social media and dating platforms. In short, there are no free lunches, so one should be cautious of online romances.
On July 21, the U.S. Department of Justice announced that Chinese-American engineer Chenguang Gong from California had admitted guilt for stealing commercial secrets related to “U.S. missile tracking technology.” Under the law, he could face up to 10 years in prison.
This 59-year-old engineer holds dual Chinese and American nationality. Prosecutors revealed that Gong briefly worked at a Los Angeles-based company specializing in developing high-tech sensors. During this time, Gong covertly copied over 3,600 secret documents involving blueprints for precise infrared sensors used by the U.S. government to detect nuclear missile launches, track ballistic missiles, and hypersonic missiles; blueprints for sensors used to detect incoming heat-seeking missiles for U.S. military aircraft; and mechanical component drawings for cooling next-generation sensors, among others.
These technologies are crucial for U.S. national security, with a value reaching potentially hundreds of millions of dollars. Many stolen documents were marked with phrases like “for official use only,” “proprietary information,” “export control,” and “company proprietary.”
Moreover, the Justice Department discovered that between 2014 and 2022, Gong had worked for several major U.S. tech companies, made multiple trips to China, and submitted applications to CCP-operated “talent programs,” expressing willingness to contribute to CCP military integrated circuit projects.
Externally, this CCP-managed “talent program” is considered a crucial means for the CCP to attract foreign technical talents, acquire cutting-edge technology, and drive military development.
As per Gong’s plea agreement, his criminal actions resulted in economic losses surpassing $3.5 million.
Currently, Gong has been released on bail after posting a $1.75 million bond. A federal court will convene a sentencing hearing at the end of September this year to determine his final sentence.
Recent reports indicated that the founder of the prominent mainland Chinese renovation company “Beautiful Home,” 53-year-old entrepreneur Zeng Yuzhou, tragically leaped off a high-rise building on July 17 and passed away.
Zeng Yuzhou was one of the pioneers of the “all-inclusive renovation” model. In 2001, he founded “Beautiful Home,” which became mainstream in the industry due to its “all-inclusive renovation” approach, earning him the titles of “renovation principal” and “renovation godfather.” Quickly, the number of Beautiful Home stores exceeded 160, having renovated over 550,000 homes.
Zeng Yuzhou was a central figure at Beautiful Home. The day after his passing, on July 18, Beautiful Home issued a “closure notice,” citing long-term losses due to the downturn in the real estate industry, mentioning their inability to sustain operations and thus cooperating in bankruptcy liquidation proceedings.
The news sent shockwaves through the entire industry. This was not just an ordinary closure but an immense blow to many parties involved.
Let’s begin with the employees who suddenly found themselves at a loss when Beautiful Home closed its doors. Even before the business collapsed, Beautiful Home had a history of long-delayed payment of employee wages.
According to some netizens, last year, their father had renovated five or six houses for Beautiful Home, but payment for the work was delayed. After repeated requests, Beautiful Home only offered a few thousand yuan as living expenses, leaving close to one hundred thousand yuan unreceived. Upon learning of the owner’s tragic incident, the father cried uncontrollably.
Beyond the employees, customers who had paid for renovations were left in the lurch.
On July 18, in a Beautiful Home store in Huadu, Guangzhou, over twenty homeowners rushed to seek legal recourse as their renovations abruptly halted.
Some netizens revealed that a friend had purchased a villa and prepaid 250,000 yuan, but with the company’s closure, over 200,000 yuan vanished instantly.
Another netizen expressed anger after pre-paying nearly 100,000 yuan for a renovation that hadn’t begun. With the company shutting down, the netizen was left in limbo paying for expenses with no progress.
Furthermore, a netizen mentioned paying over one hundred thousand yuan for a renovation that stalled halfway before the company suspended operations, rendering the house uninhabitable, yet expenses continued to pile up.
Compared to employees and customers, suppliers at Beautiful Home suffered more severe losses. Due to long-term losses, Beautiful Home owed heavy debts to major suppliers, ranging from tens of thousands to millions. Outstanding bills were overdue for months, with some supposed to be settled within 18 days but delayed for six months, unfinalized even as the company ceased operations.
Presently, the headquarters of Beautiful Home remains closed, but many homeowners and suppliers seek answers. In response, the police stated that the owner’s death does not affect debt resolution, urging victims to register pertinent information at the local police station or initiate legal proceedings for safeguarding their rights.
Many victims acknowledge that the money is gone, and recovery seems unattainable. However, the losses are substantial, and even if there is a glimmer of hope, they are willing to make the effort.
Regarding this tragedy, blogger “Knife Brother” remarked that if there were even a shred of hope, Zeng Yuzhou would have chosen to persevere. He opted for such an extreme course because he realized that his business was beyond saving.
In fact, Zeng Yuzhou’s decision was not isolated. Over the past three months, several privately-owned entrepreneurs have chosen the same path, departing from this world.
For instance, in April this year, Bi Guangjun, the boss of Shaoxing Jindianzi Textile Technology Company, committed suicide; in June, Liu Wenchao, the CEO of Xizi Elevator Technology Co., and Shen Kangming, a 54-year-old director of Zhejiang Construction Investment, also plunged to their deaths.
The deaths of these entrepreneurs have inflicted enormous pain. Behind their tragedies lie hundreds losing their livelihoods, countless consumers losing their rights, and the survival of upstream and downstream companies in jeopardy.
Now, this “economic winter” continues. The future development of mainland China remains to be seen. We will watch closely.