Multiple merchants in a steel market in Chengdu claim to have been victims of a Ponzi scheme

Recently, a merchant at Longgang Digital Steel Union Plaza in Chenghua District, Chengdu, Sichuan Province reported that Jiang, a major steel trader in the market, fraudulently obtained money and goods from multiple merchants by paying large deposits in exchange for unit price discounts or gradually increasing the amount of outstanding debts. According to rough statistics from damaged merchants, at least dozens of companies have been defrauded, with involved funds exceeding one billion yuan. In response, the Chengdu Public Security Bureau stated that they are currently conducting further investigations and evidence collection in accordance with the law.

On December 16th, Jimu News reporters met several victims at Longgang Steel Trade Market. They were all merchants engaged in steel trade, including upstream spot traders and downstream terminal merchants.

According to multiple victims' descriptions, they suffered losses ranging from millions to tens of millions of yuan, all of which were caused by the violent actions of the "big spender" Jiang in the market, and each suffered losses in different ways. According to their rough statistics, the involved funds far exceeded one billion yuan.

Merchant Chen Chen (pseudonym) introduced that he engages in steel buying and selling transactions. Through someone's introduction, he met Jiang. He once signed a price protection agreement with a company controlled by Jiang. The agreement roughly stated that he would pay a deposit to the company controlled by Jiang, and Jiang could offer a discount on the price of steel. The more the deposit, the greater the discount. "The daily transaction deposit is not fixed, and the goods are shipped after each transaction payment is made

According to the agreement documents provided by Chen Chen, "Party B shall make a prepayment of more than 2 million yuan to the designated account of Party A (Jiang), with a discount of 30 yuan/ton based on the daily market price. For every 1 million yuan increase in the minimum guarantee balance, an additional discount of 5 yuan/ton will be given, increasing in increments. Party B shall make the prepayment as a deposit for the preferential policy." The agreement also stipulates that "Party A shall not misappropriate the deposit and shall unconditionally refund it when Party B requests a refund

Chen Chen paid a deposit of 5 million yuan to Jiang before and after, until September 26th. Several merchants in the market reported that Jiang was unable to ship normally, and he contacted Jiang to refund the deposit but was unsuccessful.

Spot trader Ai Jun (pseudonym) has also been trading with Jiang, who purchases steel from Ai Jun at market prices. From 2021 to 2023, the trade between the two was normal, but Jiang gradually requested an increase in the amount of outstanding debt. As a result, he did not receive payment for the steel supplied by Ai Jun in August and September 2024, resulting in a loss of millions of yuan.

Among the merchants seen by the reporter, Mr. Wang (pseudonym) suffered the most losses, reaching over 30 million yuan. The transaction model between Mr. Wang and Mr. Jiang is to prepay for the goods and lock them up, and then pick them up at the agreed time, which varies from 10 days to 30 days. Mr. Wang said that in previous transactions, there has never been a situation where Jiang did not deliver the goods as agreed. In September of this year, the agreed time expired, but they were unable to receive the steel, and Jiang was unable to refund the payment. Now that he has both money and goods, he still needs to bear high debts.

We have traded with him in the past without any problems, so we will continue to pay for the goods or make him owe, "Chen Chen said. He also questioned how Jiang could make a profit by selling steel at a discounted price, but the other party only said that he could make a profit through futures, and he did not investigate further. It was not until September 26th that several merchants found that Jiang was unable to ship on time, discovered a thunderstorm, and reported it to the police.

On the political platform, some people have also raised the same issue. In the political complaint information, two complainants claimed to have encountered a "Ponzi scheme" in the steel trading industry, accusing Jiang and his actual controlling company of conducting "two-way short selling" in the steel trading market through "forward trading" until the explosion on September 26th.

On October 16th, the Chengdu Public Security Bureau responded to two complaints about Jiang on the Wenzheng platform, with the same content: "Regarding the issues raised in your letter, after verifying and understanding with the Chenghua Public Security Bureau, the Xincheng Police Station of the bureau received a report from the public on September 26, 2024, claiming to have been involved in steel trade fraud by the Rundu Technology Gang in Chenghua District, Chengdu. After the report was made, the police station immediately registered the report and reported it to the bureau for investigation in accordance with the law. Due to the need for cross regional investigation and the complexity of the situation, the investigation work is still ongoing. Currently, the public security organs are conducting further investigation and evidence collection in accordance with the law

The decision letter from the Chenghua Branch of Chengdu Public Security Bureau provided by the merchant shows that the police have initiated an investigation into fundraising fraud.

On December 17th, staff members of the Sichuan Steel Circulation Association told Jimu News reporters that relevant personnel have been following up on this matter. As they are not responsible for this matter, the details are currently unclear.

Chen Chen stated that according to his understanding, Jiang has been subjected to compulsory measures by the police. He hopes to investigate the case as soon as possible and refund the defrauded funds.