Summary of the Core Content
This news report discusses Tuanli.com, a platform under Henan Jingzhi Company. Under the guise of “shopping rebates + group purchase discounts,” the platform attracted merchant funds through excessive spending on subsidies, developing an agent hierarchy, and encouraging fake transactions. Eventually, it ceased operations due to a financial crisis. Seven years later, its actual controllers, Zhao (the chairman) and Wang (the president), were convicted of illegally absorbing public deposits in the first-instance court, receiving sentences of seven years and six months respectively. Both have since appealed, and the second-instance trial is ongoing.
Detailed Analysis
1. How was Tuanli.com’s “money-making myth” designed?
Tuanli.com promised merchants and agents the following:
- Hierarchical profit structure: City and county-level agents were required to pay agency fees; these agents then recruited “creators,” who in turn brought in merchants. Each level received commissions: city-level agents got 2% of the city’s total commissions, county-level agents got 5%, and creators received 9% of the profits contributed by the merchants they referred.
- Attractions for merchants: Merchants could not only gain customers through the platform but also earn additional revenue from cross-business transactions—each time a customer used Tuanli.com to make a purchase, the merchant would receive 7% of the platform’s profits.
- False promises about financial security: The platform claimed that transaction funds were managed by third parties and banks, with them only handling the accounting, making it seem like the money was completely secure. However, this turned out to be a lie.
All these elements were designed to encourage more people to invest.
2. Why did the court determine this as illegal absorption of public deposits?
The court concluded that Tuanli.com’s operations constituted illegal fundraising:
- Excessive subsidies as bait: Merchants could only withdraw 90% of their earnings, with the remaining 10% going as commissions. The platform promised to subsidize up to nine times this amount, resulting in an absurdly high return on investment.
- Public recruitment efforts: The company promoted itself through investment conferences and training sessions to attract merchants to register.
- Encouragement of fake transactions: To generate large amounts of data, agents and merchants were required to transfer funds directly to the company, which effectively meant that the platform was absorbing these funds.
These practices met the criteria for illegal deposit absorption: they involved raising money from the public without financial authorization and promising high returns.
3. Where did the money go, and what was the total loss?
Auditorial findings showed:
- From June 2018 to May 2019, Jingzhi Company raised approximately 837 million yuan; merchants withdrew 825 million yuan (most of which likely went towards subsidizing the scheme).
- From 2017 to 2018, the company also received over 18 million yuan in equity investments and agency fees.
- 164 customers filed complaints, with an investment total of over 9.28 million yuan; only 2.28 million yuan was withdrawn, resulting in a loss of about 7 million yuan.
Wang received more than 200,000 yuan in compensation from the company and has returned the illicit funds; Zhao’s relatives were not held accountable.
4. Lessons for ordinary people:
- Don’t be fooled by seemingly generous subsidies: Offers like 9x returns are unlikely to be sustainable, and such spending patterns will eventually collapse.
- Be wary of requiring upfront payments or encouraging fake transactions: These are common tactics used in fraud.
- Verify financial regulations: Always confirm whether there is real third-party and bank supervision; don’t trust the platform’s claims alone.
- Report issues promptly: If a platform closes suddenly or you can’t withdraw your money, immediately gather evidence and report it to protect your rights.
5. Trial outcomes and subsequent developments:
In the first-instance trial, Zhao was sentenced to seven years and six months, and Wang to six years. Both have appealed, with the second-instance trial still underway. Wang’s family stated that he was mainly responsible for marketing efforts and had returned more than 200,000 yuan in illicit funds; Zhao’s relatives were not implicated in the case.
This case serves as a reminder: Any business model claiming “high returns with no risk” should be thoroughly questioned—there is no such thing as a free lunch.