Google has filed a RICO lawsuit against two Chinese scammers it alleges are behind the OTCAI “click a button” app Ponzi.
Named defendants in Google’s filed April 4th Complaint are:
- Yunfeng Sun (aka Alphonse Sun), an app developer believed to reside in Shenzhen, China
- Hongnam Cheung (aka Zhang Hongnim, Stanford Fischer), an app developer believed to reside in Hong Kong, China
As alleged by Google, Sun and Cheung
have engaged in a persistent, continuing scheme to defraud consumers, despite Google’s efforts to combat the scheme to protect users on its platforms by investigating and suspending offending fraudulent apps that Defendants uploaded to Google
Play.
The apps in question are of the “click a button” Ponzi variety, of which BehindMLM has documented well over one hundred.
Despite their efforts to stay on top of Sun’s and Cheung’s scamming through Google Play, Google Workspace, Gmail, Google Voice and YouTube, Google claims they
have persisted in uploading new apps to Google Play, using varying computer network infrastructure and accounts to obfuscate their identities, and making material misrepresentations to Google in the process.
Since 2019, Sun and Cheung are alleged to have uploaded eighty-seven apps to Google Play.
While Defendants varied their approach from app to app, the means and methods were substantially similar.
Specific “click a button” app Ponzis cited by Google include TionRT, Starlight Project, SkypeWallet and OTCAI.
OTCAI launched in April 2022. It was your typical tether (USDT) “click a button” app Ponzi, representing users click a button correlated with fictional trading.
Google cites BehindMLM’s coverage of OTCAI’s collapse in June 2022 in their Complaint.
Through these scams and Xiangying, Inc a shell company registered in New York, Google alleges Sun and Cheung have defrauded around 100,000 consumers. Google claims ~8700 of defrauded consumers are US residents.
Sun’s and Cheung’s scamming took place through human trafficked slaves posing as friends of potential romantic partners;
Defendants or their agents would send text messages using Google Voice to potential victims, primarily in the United
States and Canada.The messages were designed to convince the targeted victims that they were sent to the wrong number (for example, “I am Sophia, do you remember me?” or “I miss you all the time, how are your parents Mike?”).
If targeted victims responded (for example, by telling the senders that they must be sending messages to the wrong number), Defendants or their agents would try to strike up a conversation and after exchanging initial messages with the victims, shift the conversations to other messaging platforms such as WhatsApp.
Defendants or their agents would then attempt to develop a “friendship” or “romantic relationship” and ultimately try to persuade the victims to download and invest through one of their apps.
The “friend” or “romantic partner” would offer to guide the victim through the investment process, often reassuring the victim of any doubts they had about the apps, but then disappear once the victim tried to withdraw funds.
Online videos;
Defendants or their agents created online videos, including on YouTube, promoting the fraudulent investment apps.
The videos were designed to convince potential investors that the investment platforms and cryptocurrency were legitimate, safe, and effective by providing information about the history of the investment platforms and the cryptocurrency, such as
introducing viewers to the “leadership teams” (which, on information and belief, were in fact paid actors).The videos would promise high rates of return, for example, two percent daily investment return.
And MLM compensation plans;
Defendants or their agents lured victims using in-person and online marketing programs that convinced users to become
“affiliates” of the apps on the promise that they would earn commission by signing up additional users.Through these affiliate programs, Defendants advertised their apps on social media as a guaranteed and easy way to earn money.
Google further alleges Sun’s and Cheung’s illegal conduct
has caused substantial financial losses to Google users. According to user complaints, financial losses appear to range from one hundred to tens of thousands of dollars per individual victim.
Defendants have also caused substantial harm to Google.
Defendants’ scheme has caused Google to expend substantial resources to detect, deter, and disrupt Defendants’ actions and thereby protect Google users and Google’s products and services.
By using other Google products to support their scheme, Defendants also threaten the safety and integrity of those other products, including YouTube, Workspace, and Google Voice.
Defendant’s scheme has thus impaired Google users’ confidence and trust in Google, its services, and its platforms.
Across six claims of relief, Google has sued Sun and Cheung for;
- violations of the Racketeer Influenced Corrupt Organizations Act (RICO), specifically racketeering, wire fraud and conspiracy to commit wire fraud;
- breach of contract, Google Play app TOS;
- breach of contract, Google’s Developer Program Policies;
- breach of contract, Google’s TOS
- breach of contract, YouTube Community Guidelines
- breach of contract, Google Voice Acceptable Use Policy
Google maintains it
is committed to ensuring the integrity of Google Play.
Upon discovering fraudulent behavior, including but not limited to, discovery through diligent investigation of victim complaints, Google suspends and shuts down fraudulent apps and other Google infrastructure associated with the Fraud Scheme (for example, Workspaces, Google Voice numbers) based on violations of the Developer Agreement or the Google Terms of Service.
Stay tuned for updates as BehindMLM continues to track Google’s case.