On December 26, 2022, Mr. Wang, who lives in Zhongxiang, was pulled into the group by his good friend "Hailang". The group was enthusiastically introducing a virtual currency investment project called MOS coin, and his friends in the group were scrambling to show off their high-yield screenshots. The constantly jumping high-yield numbers and words such as "guaranteed profit", "make a fortune", and "make money without losing" made him very excited.
After watching for a few days, Mr. Wang purchased MOS coins worth 5,000 yuan through the link posted by the owner of the skirt. Unexpectedly, the skirt was banned not long after, and the purchased virtual currency could not be withdrawn. Mr. Wang realized that he had been cheated and reported the case to the public security organs.
After investigation, a pyramid scheme organization headed by Chen, Ding and Fu gradually surfaced.
In October 2021, Chen, Ding, and Fu were invited to Wuhan to participate in a decentralized finance project. After in-depth understanding, Chen believed that the industry had good prospects, so the three hit it off and decided to issue their own virtual currency MOS to obtain income. Subsequently, Chen, Ding, and Fu agreed on matters such as the promotion model, reward system, and profit distribution mechanism, and traveled to Shandong to find Lu, the head of a software design company (handled in another case), to develop the virtual currency software MOSDapp. In February 2022, MOSDapp was officially launched.
On February 19 of the same year, Chen and three others held a press conference for the MOSD app at a hotel in Wuhan, and called on their friends to participate in the MOS coin project. At the same time, they established a pyramid scheme organization called the Starfish Community under the pretext of investing in the MOS coin project.
In order to improve the promotion efficiency, Chen and two other persons used the Internet platform and held offline training sessions across the country to promote the MOS coin project. They developed members through the Starfish Community, lured others to invest in and purchase MOS coins to become members and develop downlines, and gave corresponding rebates to upline members according to the number of downlines developed and the amount of fees paid by downline members, thus forming an upline and downline hierarchy.
After several months of meticulous promotion, the organization grew rapidly. To facilitate management, the three divided the organization into five major battle zones and sixteen pioneer groups according to the region, and selected key members to be responsible for each of them. The five major battle zones organized members to hold morning meetings through online chat software every day, calling on members to complete the assigned performance tasks.
As of the time of the incident, MOSDapp had more than 10,000 registered member accounts, with the highest level being 17, and the amount involved in the case reached more than 57 million yuan.
"MOS coins have no actual value, and the project does not have any real business activities. It relies entirely on the continuous development of downlines to maintain operation. The money earned online is actually the money invested by the downlines. Once there is no steady stream of downlines investing funds, the project will collapse." said a police officer from the Economic Crime Investigation Brigade of the Zhongxiang City Public Security Bureau.
Ding, Fu, and Chen directly or indirectly developed more than 41 downlines through MOSDapp, and their organizational form has constituted a pyramid scheme in the sense of the criminal law. On January 11, 2023, after Chen, Ding, and Fu were arrested, they all truthfully confessed the facts of the crime and voluntarily returned more than 22.59 million yuan of illegal gains.
On December 22 of the same year, the case was transferred to the Zhongxiang City Procuratorate for prosecution. The prosecutor in charge believed that the facts of Chen, Ding, and Fu's actions were clear, the evidence was solid and sufficient, and their actions constituted the crime of organizing and leading pyramid selling activities in accordance with Article 224 of the Criminal Law of the People's Republic of China.
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