Los Angeles’ Chinese community continues to face a growing number of fraud cases, with hundreds of victims recently joining forces to sue RAC Development Inc, a real estate investment company in Southern California, for allegedly deceiving them by promoting fraudulent investment projects such as reselling houses and hotels. Lawyer Xu Zhiming from Los Angeles warned the public to be wary not only of Ponzi schemes but also of investment scams carried out through the internet and even relationships, urging everyone to be vigilant and cautious.
Xu Zhiming explained that a new type of computer fraud involves sending messages claiming the victim’s computer information is at risk of being stolen or deleted. When victims call the provided phone number, they are tricked into changing their passwords, giving away personal information, computer access, and even banking details. This scam tactic is elaborate, often involving multiple phone transfers where the scammers initially pose as “Microsoft support” then transition to claiming to be “federal government agents,” trapping individuals in the scenario set by the fraudsters and leading them to unknowingly lose millions of dollars.
The fraudulent groups operating in Los Angeles are fluent in Chinese, English, and Spanish, and victims come from various backgrounds, not limited to the Chinese community. Xu Zhiming mentioned that direct bank transfer scams have become less common, with scammers now creating fake investment apps or websites to lure victims into investing more funds. The scam groups provide small profits on paper to entice victims to invest larger sums. When victims attempt to withdraw their earnings, the scammers request additional high fees or service charges for various reasons.
For instance, Xu Zhiming cited a scenario where victims are recommended to invest in “gold.” After purchasing gold and receiving complete receipts and orders, the fraudsters continue to deceive victims into giving more money, even demanding property mortgages. When victims finally confess to their family about using the money for investments, they often realize too late that they have lost a significant portion of their life savings and regret their decisions.
Another form of fraudulent investment involves setting traps using “romantic” tactics, where scammers use photos of luxury cars and mansions to attract victims and use Artificial Intelligence (AI) to simulate video chats with the victims. The fraud groups record numerous short videos to make victims believe they are engaged in real conversations, when in reality, it could just be a computer engineer simultaneously maintaining chats with dozens of people.
Many victims in this category are often housewives, typically those whose husbands control the finances and overlook their contributions at home. Exploiting the desire of these women to make an “economic contribution” to the family and offering consolation for their household and childcare efforts, fraudsters easily deceive them. Initially, victims might withdraw small profits of one or two thousand dollars to gain trust. However, after more money is invested, the scammers fabricate excuses like multiple transfers flagged for money laundering, resulting in victims losing all their investments.
Xu Zhiming emphasized the importance of not blindly trusting websites or video calls, as creating fake websites is simple, and AI can fabricate images and videos with ease. He warned against believing in any investment platforms provided by strangers, as they are often traps set by scam groups, stressing the need to avoid greed at all costs.
Furthermore, Xu Zhiming alerted victims that most investment fraud cases result in lengthy legal battles, with the masterminds already having vanished, making it challenging to recover funds. Even if the culprits are located, they may have already transferred the money elsewhere. He advised the public to exercise caution when investing, especially when the profits seem too good to be true, and if unfortunately defrauded, to report the incident to the authorities.
Although law enforcement primarily focuses on solving cases rather than recovering funds, Xu Zhiming mentioned that seeking legal redress through civil litigation also faces challenges in recovering the full amount. Additionally, there are fraudulent practices by fake lawyers targeting victims for a second round of scams, exploiting their vulnerable state to extort more money. When seeking legal help to recover losses, it is crucial to select licensed professionals willing to discuss the case face-to-face.