On June 8, 2022, the Supreme People's Procuratorate issued the "Notice on Printing and Distributing Typical Cases of Procuratorial Organs' Fight Against and Rectification of Elderly Fraud Crimes" (hereinafter referred to as the "Notice"). The "Notice" pointed out that in order to conscientiously implement the "Opinions of the Central Committee of the Communist Party of China and the State Council on Strengthening the Elderly Work in the New Era," "allowing the elderly to share the fruits of reform and development and enjoy a happy old age," and to further advance the special campaign to combat and rectify elderly fraud, the Supreme People's Procuratorate summarized six typical cases including the "Cao Mouming Fund-raising Fraud Case," so as to actively leverage 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 commanded eight provincial public security bureaus in Hubei, Sichuan, Hebei, Hunan, Hainan, Yunnan, Shaanxi, and Jiangxi to conduct coordinated operations, launching a concentrated crackdown on two criminal groups that committed fraud against the elderly, successfully destroying 15 fraud dens and apprehending over 170 criminal suspects. They initially verified hundreds of cases nationwide with a fraudulent amount exceeding 100 million yuan.

In daily life, the elderly, due to their lack of ability to distinguish true from false information and health anxieties, have always been favored targets of fraudsters. Although the country has made efforts to combat elderly fraud and achieved initial results, the fraud methods used by criminals continue to "evolve with the times." The Changfeng Xincun Judicial Office invited Shanghai Runyi Law Firm to explain through cases, exposing the "routines" of elderly fraud, to create a favorable social environment for the elderly to enjoy a happy old age.

I. Family Affection Trap

Keywords: "adoptive kinship"; gaining trust; affinity marketing.

Crimes Involved: Fraud; Production and Sale of Substandard Products.

After entering old age, people tend to crave family companionship even more, especially for those living alone. Some criminals precisely take advantage of the elderly's lack of care, specifically targeting elderly people living alone. These criminals disguise themselves as sales personnel, warmly inquiring about the elders' well-being, visiting them to chat regularly, and even treating them as "adoptive parents." When the timing is right, these criminals will show their true colors, demanding that the elderly purchase low-quality health products or illegal financial products at high prices, sweeping away all their savings. After being deceived, the victimized elderly often remain attached to the criminals' former false care, blindly trusting them and refusing to cooperate with police investigations, thereby increasing the difficulty of combating related crimes.

Typical Case:

In May 2017, Xu Mouyan, using another person's name, registered and established Bo Mou Trading Co., Ltd., specifically targeting the elderly group who were "retired and had spare money." She organized employees to promote low-priced purchased items such as commemorative coins and stamps as collectibles with artistic and collectible value, luring the elderly to purchase them with promises of 20% premium buyback after one year. To gain the elderly group's trust in the company, Xu Mouyan and others adopted many packaging tactics: First, leasing and decorating business premises, uniforming employees, and falsely promoting "the company's headquarters is located in Beijing, with nationwide chain operations, and products are legal and compliant," creating an illusion of legitimate business. Second, frequently organizing company employees to go to places where the elderly often gather, such as residential communities, parks, and vegetable markets, distributing free eggs, laundry detergent, etc., combined with false publicity to attract the elderly's attention and build relationships. Third, for the elderly who might purchase, organizing company employees to help them clean house, take care of their spouses, chat with them, and even claiming "adoptive kinship" to gain the elderly's trust. Fourth, regularly organizing the elderly to participate in the company's "auctions" and "trade fairs," directing the scam of "auctioning" and "trading" the company's collectibles, falsely promoting "early investment brings early benefits, more investment brings more benefits." To prevent the elderly's family members from finding out, Xu Mouyan and others sealed the so-called "collectibles" in black bags when selling, instructing the elderly not to open them for reasons such as "preventing light and moisture" or "affecting buyback." At the time of the case, Xu Mouyan had illegally absorbed funds totaling over 1.92 million yuan, returning only the principal and earnings of over 180,000 yuan to some elderly people, with unpaid principal exceeding 1.73 million yuan.

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

Case Commentary:

Behavior that uses deceptive methods to defraud relatively large sums of public or private property with the intent of unlawful possession constitutes fraud. Among these, if the behavior has the characteristics of illegally absorbing public deposits, it constitutes fund-raising fraud. Currently, crimes defrauding the elderly under the guise of "collectibles" and "artworks" are emerging endlessly. Specifically in this case, Xu Mouyan promoted low-value items through deceptive acts, causing the victimized elderly to fall into the misconception that these items were collectibles with artistic and collectible value, and thus handed over their money to Xu Mouyan. Her behavior conforms to the criminal constitution of fraud. At the same time, Xu Mouyan's sales of goods through promises of premium buyback and other means, illegally absorbing funds from the unspecified public, actually had selling goods as the primary purpose, and absorbing funds was the main objective, violating financial laws and regulations such as the "Regulations on the Prevention and Disposition of Illegal Fund-raising" and infringing upon the financial management order, constituting illegal fund-raising. Xu Mouyan implemented the above acts with the intent of unlawful possession and should be convicted and sentenced for fund-raising fraud.

Today, criminals precisely formulate fraud plans by taking advantage of the elderly's desire for companionship. According to confessions from some criminals, their "training concept" is to make the elderly treat them as parents, being more filial than their own children. "In this trade, it's quite common to treat the elderly as 'adoptive parents.' Warm inquiries and daily care are just basic operations. Some organizations even train employees in massage, foot therapy, and other skills, visiting the elderly regularly to give massages and wash their feet, some even going to the elderly's homes every day, caring for them without compensation..." For these false "family affections," we hope the elderly can keep their eyes open, enhance their awareness of prevention, and not easily hand over their retirement savings to others.

At the same time, children should also pay more attention to the elderly's daily lives. The reason criminals have opportunities to exploit is largely because the elderly lack companionship in life. If children can maintain frequent contact and communicate more, this can surely nip these fraud crimes in the bud.

II. Elderly Investment Trap

Keywords: elderly base; elderly apartment; reverse mortgage for elderly.

Crimes Involved: Crime of Illegal Absorption of Public Deposits; Fund-raising Fraud.

In recent years, some criminals have taken advantage of the country's policies to accelerate the development of the elderly service industry, targeting the elderly's dual needs for investment and elderly care. They launched projects with slogans such as "You invest for me, I'll provide for your retirement" and similar content, deceiving elderly investors into signing purchase contracts under the names of purchasing beds and investing in elderly facility construction. When elderly investors lacked cash, criminals even lured the elderly to use their houses as collateral for loans for investment, ultimately leaving the elderly with both their houses and money lost. These criminal activities often have characteristics such as complex case situations and difficulties in recovering funds, posing greater harm to the legitimate rights and interests of the elderly.

Typical Case:

On April 20, 2016, defendant Lu and Lu Mouming (another case) registered and established Leping City Taiyangshan Elderly Career Development Co., Ltd. (hereinafter referred to as: Taiyangshan Company). The shareholders were Hunan Taiyangshan Elderly Career Development Co., Ltd., Wang Mouqing, and Ma Moufa, with Lu as the company's legal representative. During the period from August 2016 to November 2017, defendant Lu, without approval from relevant authorities and without a resolution of the company's board of shareholders,借用Taiyangshan Company's name, through distributing flyers and holding promotion conferences, publicly advertised to society: Taiyangshan Company would provide elderly apartment housing preferential treatment for elderly who paid membership fees,and promised to repay principal and pay interest to the elderly in the form of welfare consumption cards, currency, etc. In this way, he illegally absorbed funds from 51 elderly people, totaling over 1.65 million yuan. The absorbed funds were used by Lu and Lu Mouming for consumption expenditures, cash withdrawals, or other purposes.

After trial, the People's Court held that defendant Lu, without approval from financial regulatory authorities, publicly advertised to society through flyers, holding promotion conferences, etc., promising to repay principal and pay interest within a certain period, absorbing funds exceeding 1.65 million yuan from 51 unspecified individuals, a huge amount, and his behavior constituted the crime of illegal absorption of public deposits. The People's Court sentenced defendant Lu to four years imprisonment and a fine of 50,000 yuan; continued to recover the over 1.08 million yuan in illegal gains that defendant Lu had not fully compensated, and compensate the various investors.

Case Commentary:

According to documents such as "Opinions on Strengthening the Elderly Work in the New Era" and the "Fourteenth Five-Year Plan for National Elderly Care Development and Elderly Service System Planning," to solve the major issue of population aging and allow the elderly to share the fruits of reform and development and enjoy a happy old age, various regions should develop institutional elderly care through various methods such as direct construction, commissioned operation, purchasing services, and encouraging social investment. However, financial activities involving the elderly care industry must also adhere to the principle of special operation for financial activities. Behavior that absorbs funds from the unspecified public without obtaining relevant administrative permits should be convicted and punished according to the crime of illegal absorption of public deposits.

Elderly bases, elderly apartments, and other projects are key components of the country's comprehensive elderly service system, closely related to the elderly's late-life security. Therefore, there is a series of complete and strict policies and regulations to ensure the smooth development of related projects. When facing promotions requiring funds in exchange for elderly services, the elderly must remain vigilant, request the other party to provide government-issued administrative permit documents allowing the absorption of funds, and verify the authenticity of the project. Verification channels include: the National Enterprise Credit Information Publicity System, the China Market Regulation Administrative Penalty Document Network, and websites of the China Securities Association.

III. Expert Diagnosis Trap

Keywords: free consultation; cure-all; expensive medicine.

Crimes Involved: Fraud; Production and Sale of Substandard Products; Crime of Illegal Medical Practice.

When people enter old age, they often invest more energy in physical health. Criminals seize upon this characteristic, using means such as "free consultations" and "expert lectures" to attract the elderly's attention, then using rhetoric to induce the elderly to believe they have serious health problems and to purchase their cheap medicines at high prices. Such crimes not only endanger the elderly's property security but may also delay genuine patients' precious treatment opportunities and harm the elderly's physical health.

Typical Case:

In April 2015, 75-year-old Wang, while going to a store, noticed an advertisement sign at the store entrance, which read: A certain well-known Traditional Chinese Medicine expert would be at a certain TCM clinic that day providing free consultations. Wang thought since it was free, he might as well go take a look, so he went to the address indicated on the sign. Upon entering the so-called TCM clinic, Wang found many elderly people gathered there for consultations, which further dispelled Wang's doubts.

When Wang met the "expert" Li, Li first asked Wang to show his medical record and felt his pulse. Then, Li took out a bottle of liquid medicine, saying it was his ancestral prescription and could reveal what diseases the body had. Wang believed it and asked Li to examine him. After Li dropped a few drops of the liquid on Wang's arm, the liquid turned purple-red, and Li told Wang that his qi and blood were severely stagnated. Wang was shocked and asked Li how to treat it. At this point, Li wrote a prescription worth 2,500 yuan, saying that as long as he took the medicine, he would be cured. Wang believed it without doubt 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 nothing but a common color-changing reagent, which would turn purple-red whenever poured out. Li used this routine to defraud people for a long time, with the criminal amount reaching 530,000 yuan. After the case was uncovered, Li was sentenced by the People's Court to five years imprisonment for fraud and a fine of 100,000 yuan.

Case Commentary:

Cases of setting up TCM clinics and defrauding the elderly under the guise of folk expert TCM consultations occur from time to time. In such cases, criminals impersonate doctors with medical qualifications, inducing the elderly to purchase medicines at high prices through deception or other means, suspected of the crimes of illegal medical practice and fraud. In this case, Li, under the pretense of medical practice, sold medicines of no actual value at high prices through false publicity to swindle money, and should be convicted and punished for fraud.

No matter how these criminal behaviors are updated, they cannot escape the elderly's desire for health. We hope the elderly will purchase medicines at regular hospitals or pharmacies. Remain vigilant when facing "cure-alls" and "free consultations." When necessary, verify through websites such as the National Medical Products Administration.

IV. Low-Cost Travel Trap

Keywords: low-cost rebate; elderly travel; unreasonable low price.

Crimes Involved: Fraud; Crime of Organizing and Leading Pyramid Selling Activities.

With the continuous improvement of people's living standards, travel has gradually become an important form of entertainment. Elderly people also like to travel with companions, enjoying their retired life. However, there are always a few people who target the elderly's travel market, luring the elderly to participate in low-cost or even free travel. But in reality, these "low-cost" options not only contain consumption traps targeting the elderly but also lack basic safety guarantees, endangering the elderly's property rights and physical health.

Typical Case:

One day in 2017, 67-year-old Chen encountered Wang distributing business cards in a certain square. Wang claimed that his travel agency had many years of cooperation with the local cultural department and had a low-cost travel project for the elderly, with each person paying 1,500 yuan to participate in a 5-day Thailand tour. Chen saw many elderly people around Wang similar to himself, and with the low price, he dispelled his doubts and gathered some friends to sign up for the project.

However, upon arriving in Thailand, Chen found that this travel experience was vastly different from what he had imagined: all the attractions were shopping malls or conference halls, and at every location, consultants promoted products, and one could not leave the hall without purchasing products. Besides the shopping malls, there were also many so-called "project briefings," promoting virtual currencies, mining machines, and insurance investment projects to the elderly. These investment projects not only offered high rebates, but investors could also earn more commissions by developing other members. Chen and others were unhappy inside, but due to language barriers, they could not seek help from others and had to endure the entire trip in silence.

Upon investigation, it was found that Wang and others' travel agency specialized in low-cost travel projects to attract the elderly, inducing or even forcing the elderly to consume and promoting investment products to them. Among these, investment products could earn more commissions through developing members, constituting a pyramid scheme structure that attracted pyramid participants to join, thus forming the crime of organizing and leading pyramid selling activities. After trial, the People's Court sentenced the directly responsible personnel of the travel agency to six years imprisonment for the crime of organizing and leading pyramid selling activities.

Case Commentary:

These so-called travel products mostly attract elderly consumers with low prices, and generally sell various products to the elderly during the trip, ranging from health products to houses, in a wide variety. These group tours mainly targeting the elderly have uneven quality, and problems are prone to occur in both safety guarantees and product quality. Coupled with the lack of quality assurance for travel services themselves, the elderly are also prone to encountering dangers during travel. Therefore, when choosing a travel agency, elderly consumers can check the travel agency's "Travel Agency Business License" and "Business License," to determine whether the travel agency is a legitimate tourism enterprise. In addition, according to the "Tourism Law of the People's Republic of China," travel agencies shall enter into written tourism service contracts with tourists, which should include travel itinerary arrangements, standards, and other content, and shall explain them in detail to tourists. Otherwise, the travel agency will face administrative fines. Therefore, when purchasing travel products, the elderly should pay attention to signing written contracts with the travel agency to protect their legitimate rights and interests. Also, if coerced into consuming during travel, be sure to keep relevant shopping invoices, as these are important evidence when seeking rights protection.

V. Anti-Fraud Tips

1 Maintain Correct Health Concepts

Health products claiming to "cure all diseases" and "promote longevity" are all three-no products with false publicity by criminals. Some criminals, in order to achieve promotional effects, even add stimulants such as caffeine, seriously harming the elderly's physical and mental health. Elderly consumers should not easily believe so-called miracle drugs, remember to go to a regular hospital for diagnosis and treatment when feeling unwell, follow doctors' advice based on your physical condition, and purchase medicines from regular hospitals and pharmacies.

2 Remember That There Is No Free Lunch

Elderly investors must remain vigilant when facing high-return investment products with "huge profits with little effort" and "sure profits with no risk." First, you can query business registration information to verify whether the relevant enterprise is a legally registered enterprise and whether it has completed tax registration, etc. If the enterprise's subject information cannot be found, the likelihood that the other party is actually a criminal is relatively high; second, you can query through government websites whether the company is listed and whether it has the administrative permit for legally collecting public funds; finally, even if no problems are found after the above queries, you should remain vigilant against all financial products that "promise to repay principal and pay interest" without indicating investment risks.

3 Communicate More with Children and Other Family Members

The elderly, constrained by their access to information and cognitive abilities, cannot accurately identify every fraud scheme. Therefore, when the elderly need to spend money and are uncertain, they should inform their children or other family members, seek opinions, discuss countermeasures, and be resolute when reporting to the police is necessary. Especially when the other party requires the elderly to make bank transfers, be vigilant, never go alone to handle such matters, discuss with family members, and upon arriving at the bank, be sure to consult bank staff's opinions and do not easily transfer money. Children should also always pay attention to the elderly's physical and mental health, visit them often, share anti-fraud knowledge, and especially maintain patience and good communication skills when interacting with the elderly.

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

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

2. China Market Regulation Administrative Penalty Document Network: https://cfws.samr.gov.cn/

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

4. Shanghai Special Action Office for Combating and Rectifying Elderly Fraud Report Email: shshb2018@126.com

Contributed by Wu Renjie (Paralegal), Fang Qiqi (Lawyer), Shanghai Runyi Law Firm