Zhongjin System used intelligent investment advisory as a shell to set up a private fund pool, illegally raising 40 billion yuan

Who Gets Targeted

The victim groups are predominantly elderly individuals aged 50 and above, with weak financial literacy, who have savings on hand and a strong desire to beat inflation. They are often driven by the anxiety that "bank deposit rates are too low, and inflation is eating away at retirement funds," and they develop trust due to encouragement from peers or long-term attentive greetings from financial advisors. The 40% annualized return promised by the Zhongjin system back then precisely struck this group's fantasy of high-yield guaranteed principal and returns. Even with persuasion from their children, they would self-persuade by saying "neighbors have already received their interest," ultimately investing their life savings under information asymmetry and herd mentality.

骗局怎么运作

• Step 1: The fraudsters first used the name of "Shanghai Zhongjin Equity Investment Fund Management Co., Ltd." and associated companies to rent high-end office buildings in Shanghai's core commercial districts, decorating them into business premises resembling regular financial institutions, and displayed business licenses and private equity fund manager registration screenshots to the elderly to manufacture the illusion of a licensed institution.
• Step 2: The offline roadshow team entered community activity rooms, universities for the elderly, and morning exercise spots in parks, initially giving away small gifts such as eggs, rice, flour, and edible oil to lure the elderly into attending so-called financial lectures. During the lectures, sales staff wore uniforms and repeatedly emphasized cutting-edge-sounding concepts like "intelligent investment advisory systems" and "online lending matchmaking," while actually lacking any genuine underlying assets.
• Step 3: The third step was setting up a "tiered rebate" recruitment mechanism, granting cash rewards or higher return tier qualifications for every new investor brought in. After being dragged into the scheme by neighbors or relatives, the elderly saw that acquaintances really did receive interest, causing their vigilance to drop sharply and forming a self-propagating, multi-level marketing-style capital chain.
• Step 4: The fraudsters built a good reputation by short-term full cashing out of small-scale principal and interest, encouraging the elderly to make additional investments. In the early stages, the platform did indeed pay the promised high interest on a monthly basis, but the source of funds was not investment returns, but rather the principal of new investors entering later, belonging to a typical Ponzi structure.
• Step 5: Once the capital scale rolled to tens of billions, the platform would restrict withdrawals under the pretext of "system upgrades" or "intelligent investment advisory strategy adjustments," and launch a one-time lock-up period bait, requiring continued reinvestment to preserve the returns on old products. At this point, the elderly did not dare to report to the police out of fear of both principal loss and interest nullification, and the platform seized the opportunity to transfer the funds.
• Step 6: After the case broke, the asset recovery and refund cycle was extremely long, with the Zhongjin system having cumulatively refunded only nearly 30% of the net principal by the end of 2024. During the long wait, victims were often targeted again by other secondary scams operating under banners like "internal liquidation channels" and "priority refund groups."

红旗信号（看到这些快跑）

• 🚩 Promising an annualized return of 40% with guaranteed principal and returns, far exceeding the reasonable return levels of regular financial products during the same period.
• 🚩 Using "intelligent investment advisory" and "online lending" as shells, but failing to provide underlying asset proof or fund custodian bank information.
• 🚩 Targeting precise marketing mainly toward elderly groups, inducing them to attend offline financial lectures through perks such as gifts and travel.
• 🚩 Company registered names containing "equity investment fund" or "asset management," yet openly peddling small-scale products to non-qualified investors during the sales process.
• 🚩 Early interest arriving punctually, while later suddenly restricting withdrawals and demanding reinvestment under the pretext of system upgrades or strategy adjustments.
• 🚩 Encouraging the recruitment of downlines, where bringing in people yields extra rewards, presenting obvious multi-level marketing characteristics.

真实案例

• In April 2016, Shanghai police investigated and cracked down on the "Zhongjin system" illegal fundraising case, with associated companies such as Shanghai Zhongjin Asset Management suspected of illegally absorbing public deposits, involving an amount of about 40 billion yuan and over 12,000 victims.
• In April 2016, 35 senior executives including Shanghai Zhongjin Equity Investment Fund Management Co., Ltd. were arrested by the police, and the case was publicly characterized as a Ponzi scheme, with multiple media outlets disclosing that the products had promised a 40% annualized return.
• In December 2024, Caixin reported that cases related to the Zhongjin system were still undergoing asset recovery and refunds. By the end of 2024, after the completion of the second round of refunds, nearly 30% of the net principal had been cumulatively refunded, and a large number of elderly victims were still waiting for subsequent liquidation. (Source: [https://finance.caixin.com/2024-12-04/102264326.html?originReferrer=caixinsearch_pc](https://finance.caixin.com/2024-12-04/102264326.html?originReferrer=caixinsearch_pc))
• In December 2024, according to Caixin reports, the Shanghai "Zhongjin system" illegal fundraising case that "exploded" in April 2016 recently carried out a second round of refunds to investors: for the series of cases under execution (2023) Hu 02 Zhi Hui No. 241 by the Shanghai No. 2 Intermediate People's Court, the payout amount for this round is 14% of the unredeemed amount. Combined with the 15% from the first round in July 2022, the two rounds have refunded a total of 29% of the unredeemed amount. (Source: [https://finance.caixin.com/2024-12-04/102264326.html?originReferrer=caixinsearch_pc](https://finance.caixin.com/2024-12-04/102264326.html?originReferrer=caixinsearch_pc))
• In December 2024, according to Caixin reports, aside from the "Zhongjin system" case, the Jincheng Group case had a cumulative refund ratio of 20%, and the "Zhengda system" case had a cumulative refund ratio of 30%; the mastermind behind the 40 billion yuan Zhongjin system fundraising fraud has been sentenced, with nearly 30% of the net principal cumulatively refunded over eight years, and a large number of elderly victims still waiting for subsequent liquidation. (Source: [https://finance.caixin.com/2024-12-04/102264326.html?originReferrer=caixinsearch_pc](https://finance.caixin.com/2024-12-04/102264326.html?originReferrer=caixinsearch_pc))

Official Stance

• In April 2016, the Economic Crime Investigation Corps of the Shanghai Public Security Bureau announced the filing and investigation of companies related to the "Zhongjin system," investigating and punishing them in accordance with the law for suspected crime of illegally absorbing public deposits.
• In April 2026, the inter-ministerial joint conference of the State Council issued a prompt on preventing illegal financial activities, emphasizing strict prevention and crackdown on illegal financial activities carried out using apps, and specially reminding the elderly to be vigilant against high-yield fake investments and pension project-style scams.
• Local financial supervision bureaus in multiple regions repeatedly issued announcements between 2024 and 2026, reminding investors that any investment and wealth management involving the names "Zhongjin" or "Zhongjin system" falls under the category of historical case asset recovery, and not to trust any new platforms or priority refund channels.

How to Protect Yourself

• ✅ Whenever you hear promotional combinations of "Zhongjin system," "intelligent investment advisory," or "online lending" coupled with high interest, directly classify it as a disguised secondary harvest of a historical illegal fundraising case and immediately cease contact.
• ✅ Do not attend any offline financial lectures offering perks like eggs, rice, flour, or oil, and especially do not conceal your participation from your children.
• ✅ Verify whether the company holds regular financial licenses approved by the central bank, the National Financial Regulatory Administration, or local financial bureaus, and check whether it is listed on the "Illegal Fundraising Case Investor Information Registration Platform" roster.
• ✅ Maintain vigilance against any rhetoric demanding reinvestment to preserve principal and interest. Choose to recover the principal even at the cost of losing promised interest, and do not lightly trust "internal liquidation groups" or "priority refund channels."
• ✅ If you have already participated, retain evidence such as transfer vouchers, contracts, and promotional brochures, report immediately to the local public security bureau's economic crime investigation department or financial supervision administration, and pay attention to official refund announcements.