On June 8, 2022, the Supreme People's Procuratorate issued the "Notice on Printing and Distributing Typical Cases of Prosecutorial Organs Cracking Down on and Rectifying Elderly Fraud Crimes" (hereinafter referred to as the "Notice"). The "Notice" points out that in order to earnestly implement the "Opinions of the Central Committee of the Communist Party of China and the State Council on Strengthening the Work of the Elderly in the New Era" and "enable the elderly to share the fruits of reform and development and enjoy a happy old age", and to further promote the special campaign against elderly fraud, the Supreme People's Procuratorate summarized six typical cases such as the "Case of Illegal Fund - Raising and Fraud by Cao Mouming" to actively play the role of typical cases and better safeguard the legitimate rights and interests of the elderly. At the same time, the Ministry of Public Security recently organized and directed the public security organs of eight provinces including Hubei, Sichuan, Hebei, Hunan, Hainan, Yunnan, Shaanxi, and Jiangxi to conduct coordinated operations. They carried out a concentrated raid on two illegal criminal gangs that committed fraud against the elderly, successfully destroyed 15 fraud dens, arrested more than 170 criminal suspects, initially solved hundreds of cases involving the whole country, and the amount involved exceeded 100 million yuan.

In daily life, due to their lack of ability to distinguish the authenticity of information and health - related anxiety, the elderly have always been the favored targets of fraudsters. Although the state has made efforts to crack down on elderly fraud and achieved initial results, the fraudsters' methods are still "keeping pace with the times". The Judicial Office of Changfeng New Village invited Shanghai Runyi Law Firm to explain the law through cases, expose the "routines" of elderly fraud, and create a good social environment for the elderly to enjoy a happy old age.

I. Traps of False Family Care

Keywords: "Adoptive relatives"; Gaining trust; Family - based marketing.

Alleged crimes: Fraud; Production and sale of shoddy products.

After entering old age, people often crave the company of family more, especially for elderly people living alone. Some fraudsters take advantage of the lack of care for the elderly and specifically target elderly people living alone. These fraudsters disguise themselves as salespeople, show concern for the elderly, visit them regularly to chat, and even recognize the elderly as their "adoptive fathers" or "adoptive mothers". After the time is ripe, these fraudsters will show their true colors, asking the elderly to buy inferior health products or illegal financial products at high prices, and sweeping away the elderly's savings. After being deceived, the elderly victims often indulge in the fraudsters' once - false care, blindly trust the other party, and refuse to cooperate with the police investigation, thus increasing the difficulty of cracking down on related crimes.

Typical case:

In May 2017, Xu Mouyan registered and established Bomo Trading Co., Ltd. under the name of others. The company specifically targeted the elderly group who were "retired and had spare money". It organized employees to hype up low - priced commemorative coins, stamps and other items as collectibles with artistic and collection value, luring the elderly group to buy them and promising to repurchase them at a 20% premium after one year. To gain the trust of the elderly group in the company, Xu Mouyan and others adopted many packaging methods: First, they rented and renovated the business premises, unified the employees' clothing, and falsely publicized that "the company's headquarters is located in Beijing and it operates as a national chain, and the products are legal and compliant", creating the false appearance of a regular business. Second, they frequently organized company employees to go to places where the elderly often gathered, such as communities, parks, and vegetable markets. They distributed eggs, laundry detergent and other items for free, combined with false publicity, to gain the attention of the elderly and get closer to them. Third, for the elderly who were likely to buy, they organized company employees to help the elderly clean their houses, take care of their spouses, accompany them to chat, and even recognized "adoptive relatives" to gain the trust of the elderly. Fourth, they regularly organized the elderly to participate in the company's "auctions" and "trade fairs", staging the scams of "auctioning" and "trading" the company's collectibles, and falsely publicizing that "the earlier you invest, the more benefits you will get; the more you invest, the more benefits you will get". To prevent the elderly's family members from discovering, Xu Mouyan and others sealed the so - called "collectibles" in black bags when selling them, and told the elderly not to open them on the grounds of "preventing light and moisture" and "affecting repurchase". When the case was discovered, Xu Mouyan had illegally absorbed more than 1.92 million yuan in funds, only returned more than 180,000 yuan in principal and interest to some of the elderly, and the unpaid principal was more than 1.73 million yuan.

On March 22, 2021, the People's Court of Zoucheng City, Shandong Province sentenced Xu Mouyan to seven years and six months in prison for illegal fund - raising and fraud and imposed a fine of 50,000 yuan. Xu Mouyan did not appeal, and the judgment has taken effect.

Case review:

The act of defrauding a relatively large amount of public and private property by using deception methods for the purpose of illegal possession constitutes the crime of fraud. Among them, if the act has the characteristics of illegally absorbing public deposits, it constitutes the crime of illegal fund - raising and fraud. Currently, crimes of defrauding the elderly in the name of "collections" and "artworks" emerge in an endless stream. Specifically in this case, Xu Mouyan made the elderly victims misrecognize that the low - value items were collectibles with artistic and collection value through deception, and then the elderly disposed of their money to Xu Mouyan. Her act conforms to the constitutive requirements of the crime of fraud. At the same time, Xu Mouyan's act of selling goods by promising premium repurchase and illegally absorbing funds from the unspecified public actually has the main purpose of absorbing funds rather than selling goods. It violates financial laws and regulations such as the "Regulations on Preventing and Handling Illegal Fund - Raising", infringes on the financial management order, and belongs to illegal fund - raising. Xu Mouyan carried out the above - mentioned acts for the purpose of illegal possession, and should be convicted and punished in accordance with the crime of illegal fund - raising and fraud.

Nowadays, fraudsters specifically formulate fraud plans by taking advantage of the psychological characteristics of the elderly who crave companionship. According to the confessions of some fraudsters, the "training concept" they received is to make the elderly their parents, and be more filial than their children. "In this line of work, it is quite common to recognize the elderly as 'adoptive fathers' or 'adoptive mothers'. Showing concern and daily care is just basic. Some organizations even train employees to learn massage, foot therapy and other skills, and visit the elderly regularly to massage and wash their feet. Some even go to the elderly's homes every day to take care of them for free..." It is hoped that the elderly can keep their eyes open, enhance their awareness of prevention, and not easily hand over their pension money to others.

At the same time, children should also pay more attention to the living conditions of the elderly. The reason why fraudsters have an opportunity to take advantage is largely because the elderly lack companionship in their lives. If children can keep in touch and communicate more, they will surely nip these fraud crimes in the bud.

II. Traps of Elderly Investment

Keywords: Elderly care bases; Elderly care apartments; Reverse mortgage.

Alleged crimes: Illegal absorption of public deposits; Illegal fund - raising and fraud.

In recent years, some fraudsters have taken advantage of the national policy of accelerating the development of the elderly care service industry and the dual needs of the elderly for investment and elderly care. They have launched projects with slogans such as "You invest in me, and I'll provide for your old age", and deceived elderly investors into signing purchase contracts in the name of buying beds or investing in the construction of elderly care sites. When the elderly investors lack cash, the fraudsters even lure the elderly to apply for loans with their houses as collateral for investment, and finally the elderly investors lose both their houses and money. Such criminal activities often have characteristics such as complex cases and difficulty in recovering funds, which pose a great threat to the legitimate rights and interests of the elderly.

Typical case:

On April 20, 2016, the defendant Lu Mou and Lu Mouming (handled in a separate case) registered and established Leping City Taiyangshan Elderly Cause Development Co., Ltd. (hereinafter referred to as: Taiyangshan Company). The shareholders were Hunan Taiyangshan Elderly Cause Development Co., Ltd., Wang Mouqing, and Ma Mafa. Lu Mou was the legal representative of the company. From August 2016 to November 2017, without the approval of relevant departments and the decision of the company's shareholders' meeting, the defendant Lu Mou borrowed the name of Taiyangshan Company and publicly promoted to the society through distributing leaflets and holding promotion meetings: Taiyangshan Company will provide housing discounts for the elderly who pay membership fees in the elderly care apartments, and promise to repay the principal and interest to the elderly in the form of welfare consumption cards and currency. In this way, he illegally absorbed more than 1.65 million yuan in funds from 51 elderly people. The absorbed funds were used by Lu Mou and Lu Mouming for consumption, cash withdrawal or other purposes.

After trial, the people's court held that the defendant Lu Mou, without the approval of the financial regulatory authorities, publicly promoted to the society through distributing leaflets and holding promotion meetings, promised to repay the principal and interest within a certain period, and absorbed more than 1.65 million yuan in funds from 51 unspecified objects in the society, with a huge amount. His act has constituted the crime of illegal absorption of public deposits. The people's court sentenced the defendant Lu Mou to four years in prison and imposed a fine of 50,000 yuan; and continued to recover more than 1.08 million yuan in illegal gains that the defendant Lu Mou had not fully refunded, and refunded it to each fund - raising participant.

Case review:

According to documents such as the "Opinions on Strengthening the Work of the Elderly in the New Era" and the "14th Five - Year Plan for the Development of the National Elderly Cause and the Elderly Care Service System", in order to solve the major issue of population aging and enable the elderly to share the fruits of reform and development and enjoy a happy old age, localities should develop institutional elderly care through various means such as direct construction, entrusted operation, purchase of services, and encouragement of social investment. However, financial activities related to the elderly care industry must also adhere to the principle of franchise for financial activities. The act of absorbing funds from unspecified members of the public without obtaining relevant administrative licenses should be convicted and punished in accordance with the crime of illegal absorption of public deposits.

Projects such as elderly care bases and elderly care apartments are a key part of the national improvement of the elderly care service system and are closely related to the elderly's old - age life security. Therefore, there is a series of complete and strict policies and regulations to ensure the smooth development of relevant projects. When the elderly face sales pitches that require them to provide funds in exchange for elderly care services, they must remain vigilant. They should ask the other party to issue administrative license documents allowing the absorption of funds from the government agencies and verify the authenticity of the project. Verification channels include the National Enterprise Credit Information Publicity System, the China Market Supervision and Administration Punishment Document Network, and the China Securities Association website.

III. Traps of Expert Free Medical Examinations

Keywords: Free medical examinations; Cure all diseases; High - priced drugs.

Alleged crimes: Fraud; Production and sale of substandard products; Illegal practice of medicine.

After people enter old age, they tend to devote more energy to their physical health. Criminals take advantage of this characteristic. They use means such as "free medical consultations" and "expert lectures" to attract the attention of the elderly, and then use persuasive language to induce the elderly to believe that they have serious health problems and purchase cheap drugs provided by them at high prices. Such crimes not only endanger the property safety of the elderly but may also delay the precious treatment opportunities for real patients and damage the physical health of the elderly.

Typical case:

In April 2015, when 75-year-old Mr. Wang went to a store, he noticed a billboard at the store entrance, which read: A well-known traditional Chinese medicine expert would sit in a certain traditional Chinese medicine clinic on that day to provide free medical consultations. Mr. Wang thought that it was free anyway, so he might as well go and have a look. Then he went to the address marked on the billboard. After Mr. Wang entered the so-called traditional Chinese medicine clinic, he found that there were many elderly people gathered there for medical consultations, which further dispelled his doubts.

After Mr. Wang met the "expert" Li, Li first asked Mr. Wang to show his medical record card and felt his pulse. Then, Li took out a bottle of liquid medicine and said that it was his ancestral prescription, which could detect what diseases the body had. Mr. Wang believed it and asked Li to give him a medical consultation. After Li dropped a few drops of the liquid medicine on Mr. Wang's arm, the liquid medicine turned purplish-red. Then Li told Mr. Wang that he had serious blood stasis. Mr. Wang was shocked and asked Li how to treat it. At this time, Li wrote out a prescription worth 2,500 yuan and said that as long as Mr. Wang took the medicine, he would be cured. Mr. Wang believed it completely and paid 2,500 yuan for the medicine according to the prescription.

In fact, Li was not an expert at all. The so-called "ancestral prescription" was just an ordinary color-changing reagent, which would turn purplish-red as long as it was poured out. Li used this routine to deceive people for a long time, and the amount of the crime reached 530,000 yuan. After the case was exposed, Li was sentenced to 5 years in prison for fraud by the people's court and was fined 100,000 yuan.

Case review:

Cases where criminals open traditional Chinese medicine clinics and carry out fraud against the elderly in the name of traditional Chinese medicine consultations by folk experts occur from time to time. In such cases, criminals will pretend to be doctors with the qualification to practice medicine and induce the elderly to buy drugs at high prices through deception or other means, which is suspected of the crime of illegal practice of medicine and the crime of fraud. In this case, Li pretended to practice medicine and defrauded money by selling medicinal materials of no actual value at high prices through false publicity. He should be convicted and punished according to the crime of fraud.

No matter how these criminal acts are updated, they are all based on the elderly's desire for health. It is hoped that all the elderly will buy drugs at regular hospitals or pharmacies. They should be vigilant when facing "cure-all" and "free medical consultations". If necessary, they can log in to websites such as the National Medical Products Administration for verification.

IV. Low-cost travel traps

Keywords: Low-cost rebates; Elderly tourism; Unreasonably low prices.

Alleged crimes: Fraud; Organizing and leading pyramid schemes.

With the continuous improvement of people's living standards, tourism has gradually become an important form of entertainment for people. The elderly also like to travel in groups to enjoy their retirement life. However, there are always a few people who target the elderly tourism market. They use low-cost or even free travel to deceive the elderly to participate. In fact, behind these "low prices", there are not only consumption traps for the elderly but also a lack of basic safety guarantees, which endanger the property rights and physical health of the elderly.

Typical case:

One day in 2017, 67-year-old Mr. Chen met Mr. Wang distributing business cards in a square. Mr. Wang claimed that his travel agency had a long-term cooperative relationship with the local cultural department and there was a low-cost travel project for the elderly. Each person only needed to pay 1,500 yuan to participate in a 5-day tour to Thailand. Mr. Chen saw that there were many elderly people like him around Mr. Wang. Coupled with the low price, he dispelled his doubts and then invited a few of his friends to sign up for the project together.

However, after Mr. Chen arrived in Thailand, he found that this tour was very different from what he had imagined: All the scenic spots were shopping malls or conference venues. At each scenic spot, there were consultants promoting products, and tourists could not leave the venue without buying the products. In addition to shopping malls, there were also many so-called "project briefings", which promoted investment projects such as virtual currency, mining machines, and insurance to the elderly. These investment projects not only offered high returns but also allowed investors to get more commissions by developing other members. Mr. Chen and others were dissatisfied, but due to the language barrier, they could not seek help from others and could only endure the whole tour silently.

It was found that the travel agency run by Mr. Wang and others specialized in low-cost travel projects to attract the elderly, induced or even forced the elderly to consume, and promoted investment products to them. Among them, the investment products allowed investors to get more commissions by developing members, which was a pyramid scheme structure to attract participants and constituted the crime of organizing and leading pyramid schemes. After trial, the people's court sentenced the direct responsible personnel of the travel agency to 6 years in prison for organizing and leading pyramid schemes.

Case review:

Most of these so-called travel products attract elderly consumers with low prices and generally promote all kinds of products to the elderly during the tour, ranging from health products to housing. The quality of these group tours mainly targeting the elderly varies. There are likely to be problems in terms of safety guarantees and the quality of the products sold. In addition, since there is no quality guarantee for the travel services themselves, the elderly are also prone to accidents and encounter dangers during the trip. Therefore, when elderly consumers choose a travel agency, they can judge whether the travel agency is a regular travel enterprise by checking its "Travel Agency Business License" and "Business License". In addition, according to the "Tourism Law of the People's Republic of China", a travel agency shall conclude a written travel service contract with tourists. The contract shall include the travel itinerary arrangement, standards, etc., and the travel agency shall explain them in detail to the tourists. Otherwise, the travel agency will face an administrative fine. Therefore, when the elderly buy travel products, they should pay attention to signing a written contract with the travel agency to protect their legitimate rights and interests. At the same time, if they encounter forced consumption during the trip, they must keep the relevant shopping invoices, which are important evidence for safeguarding their rights.

V. Tips for preventing fraud

1. Maintain a correct concept of health

The so-called health products that "cure all diseases" and "prolong life" are all three-no products (no production license, no quality certification, no address of the manufacturer) falsely promoted by criminals. In order to achieve the publicity effect, some criminals even add stimulants such as caffeine, which seriously damage the physical and mental health of the elderly. Elderly consumers should not easily believe in the so-called miraculous drugs. They should remember to go to a regular hospital in time for medical treatment when they are ill. They should follow the doctor's advice according to their physical condition and buy drugs from regular hospitals and pharmacies.

2. Remember that there is no free lunch

Elderly investors must be vigilant when facing high-return investment products that promise "huge profits with little investment" and "no risk of loss". First of all, they can check the industrial and commercial registration information to find out whether the relevant enterprise is a legal enterprise registered according to law and whether it has gone through tax registration, etc. If the subject information of the enterprise cannot be found, it is highly likely that the other party is a criminal. Secondly, they can check on the government website whether the company is listed and whether it has the administrative permission to legally collect public funds. Finally, even if no problems are found after the above checks, they should be vigilant against all financial products that "promise to repay the principal and interest" without prompting investment risks.

3. Communicate more with family members such as children

Due to the limited information acquisition channels and cognitive abilities, the elderly cannot accurately identify every fraud. Therefore, when the elderly need to spend money and are unsure, they should inform their family members such as children, seek their opinions, and discuss countermeasures. They should be firm in calling the police when necessary. Especially when the other party asks the elderly to transfer money from the bank, they must be vigilant. They should never handle this matter alone. They should discuss it with their family members. When they go to the bank, they must ask the bank staff for advice and should not remit money easily. Children should also pay attention to the physical and mental health of the elderly at all times, go home often, and tell them about fraud prevention knowledge. In particular, they should pay attention to communication skills and be patient when communicating with the elderly.

Finally, here are some practical websites and contact information for verifying and reporting pension fraud:

1. National Enterprise Credit Information Publicity System: https://www.gsxt.gov.cn/index.html

2. China Market Regulation Administrative Punishment Document Website: https://cfws.samr.gov.cn/

3. China Securities Association: https://www.sac.net.cn/xxgs/zqgs/

4. Reporting Email of the Special Action Office for Cracking Down on and Rectifying Elderly Fraud in Shanghai: shshb2018@126.com

Contributed by Wu Renjie (Trainee Lawyer) and Fang Qiqi (Lawyer) of Shanghai Runyi Law Firm