There is a new fraud scheme out there that preys on the Chinese belief that the connected get discounts to pretty much everything. Here’s how it works:
1. Fraud ringleader, believed to be based in China, signs up 4-5 commissioned “salespeople” to solicit money via WeChat from their fellow university students.
2. These salespeople convince the students that they can get them a five percent discount on their tuition and on their utilities. If a student’s tuition bill is 10,000, they merely pay these salespeople 9,500 and these salespeople will, in turn, pay the tuition in full. The same deal holds for utilities. In fact, students skeptical of this scheme often prove its validity to themselves by starting out with just the utilities.
3. My strong sense is that none of the students (including the salespeople) had any clue that they were helping to perpetuate what is looking like a fraud.
4. Our free advice to the students (and to anyone who reads this) has been as follows:
a. If you took any money from your fellow students (whether for a commission or not), you should seek out a criminal lawyer. If anyone in Seattle emails me, I will give them the name of the criminal lawyer to whom I have referred others.
b. If you are contacted by the police. Please, please, please tell them the truth. If you are thinking of going to the police, do not go unless you are going to tell them the entire truth and nothing but the truth. Again though, consider retaining a criminal lawyer.
c. If it sounds too good to be true, it is. Most Americans are going to have a really hard time believing that you thought it possible to get a discount on your tuition from a high end and 100% legitimate university or on your utilities, so if this thing really blows up and you need an expert witness to discuss how this was viewed as possible by so many Chinese students who had no intention of stealing anyone’s money, we have China lawyers who can explain this, even by using examples.
One of my favorites is that of a Chinese relative of one of our China lawyers who was looking for an immigration lawyer to gain U.S. citizenship. Our lawyer recommended an excellent local immigration lawyer who explained exactly how she would handle the relative’s case and how much she would charge. I believe it was around $10,000. But the Chinese relative thought this lawyer naive because he had spoken to another lawyer who for $25,000 was claiming to be able to “use his connections to get things done” and to “cut the lines” and strongly implying that only suckers do things the right way. Despite near begging from our lawyer to use the legitimate immigration lawyer, the Chinese relative (probably believing either that his own relative was getting a cut from the $10,000 lawyer or was also hopelessly naive) went with the $25,000 lawyer. To make a long story short, he is now permanently barred from coming to the US and that has been so for at least a decade. Why would someone pay so much more to do things the wrong way? Because only the naive and total suckers follow the rules.
d. Those who solicited funds from others are probably not criminally liable because they lack the mens rea necessary to be convicted of a theft crime. But they very well may be civilly liable and if sued may need to cough up all that they were paid by others, even though they passed on the funds to the kingpin or kingpins. Not surprisingly, there is no paper trail for at least some of these transactions, which will make proof very interesting.
I feel terrible that college students have to deal with this sort of thing to the distraction of their studies and we are doing what we can (for free) to assist. I just hope that these students and others who read this think twice when confronted with a scheme like this in the future. I’m guessing this scheme will spread soon to other universities, if it hasn’t already.
I have two kids, one still in college and one a relatively recent college graduate so I totally sympathize with these kids, far from home, just trying to do what they see as best. Please share the word so as to reduce the number of future victims. Any other ideas?
The Seattle Times has a story on this fraud and of how widespread it truly is.