China’s Ministry of Public Security (MPS) recently ended a major investigation involving a health care fraud scheme which victimized over a thousand people in the country, costing nearly 1 billion yuan (about $145 million). One victim lost more than 6 million yuan ($870,000) from fake medical treatment.
The MPS and Zhejiang provincial police began the investigation in April 2018 and found that a company called Slender Group engaged in fraudulent medical practices through luxury health resorts overseas, state-run newspaper China Daily reported on Dec. 6.
The police arrested 132 people involved in the case, froze assets worth more than 70 million yuan, and seized more than 3,000 boxes of counterfeit drugs and a large number of items involved, Sina reported.
In 2014, Slender Group began its operations under the guise of various beauty salons throughout China. It victimized rich and healthy women who could not speak or read in English. Once a client has become a loyal customer of the salon and established trust with the owner, the owner would reward her with a free luxury trip abroad. The travel package included a free stay at a luxury resort, free medical seminars and access to high-end medical centers that offered free health screening and consultation. In all cases, the clients were falsely diagnosed and told they had a life-threatening illness. Since the victims don’t know English, they are easily deceived by the false medical reports and are manipulated into buying expensive so-called drugs produced by Slender Group.
Wang Lan, 53, a female entrepreneur, was one of the victims of Slender Group. Wang filed a report with the Jiaxing City police in January 2018, said Chen Shiqu, deputy director of the Criminal Investigation Bureau of the MPS. Wang claimed that between 2016 to 2017, she was swindled more than 600 million yuan by a beauty salon in Jiaxing City, located in Zhejiang Province. Because Wang was a loyal customer, the salon awarded her with a free trip to a luxury resort in Thailand where she received a medical screening and was told she had a high risk for cancer. They convinced her to buy an expensive drug called “cancer shield” and claimed that it could cure her. That beauty salon was only a front for Slender Group to carry out its shady operations.
On April 24, 2018 the MPS deployed public security agents in the provinces of Liaoning, Jiangsu, Guangdong, Heilongjiang, Jilin, Beijing, Zhejiang and arrested 90 suspects.
After 42 more suspects were arrested in Hunan and Chongqing City in southwestern China, the criminal group was completely dissolved.
Zhang Limei, 50, is the head of Slender Group. Zhang, a native of a Liaoning Province, has a masters degree and was once a college professor. Zhang started a beauty salon and had earned more than 100 million yuan ($14.56 million) in 2008. In 2010, she created the company and sold foreign beauty-related products to beauty salons across China.
Chen said that since 2014, Slender Group has been recruiting agents throughout China to set up beauty salons, which would be used as a front to lure people into their fraudulent medical scheme.
In 2014, Zhang’s beauty salon was transformed into an “overseas healthcare” operation. In 2015, the company began offering free trips to Thailand only for select clients where they stayed at luxury resorts and received Slender Group’s health package, including health seminars, medical screenings and consultations.
The public security said that the so-called experts in the medical facilities abroad are fake and not qualified as doctors. The anti-cancer drug, “cancer shield,” which was purchased by many clients, is mostly made of sugar and composed of lycopene—a bright red carotene and carotenoid pigment, and phytochemical found in tomatoes and other red fruits and vegetables—and anthocyanidins, which are common plant pigments.
According to China Daily, “cancer shield” is marketed in a beautiful package, with the label “Cancer PRE” printed in gold. Each package contains 60 capsules or 120 capsules. The drug has four types, and the price ranges from 38,000 to 390,000 yuan ($5,530 to 56,900). Each capsule costs over 2 yuan ($0.29), while the cost of packaging is bit more than the tablet itself—thus, the cost of manufacturing the drug does not justify the high prices. From every sale of the drug, the beauty salon got 50 percent of the profit, the agent and the company got 25 percent each.
The police said they did not suspect any criminal activity at Slender Group because it concealed its shady dealings from the start. Besides using the beauty salons as a front, the company would make it appear that its drugs are made in the United States. It would first produce “cancer shields” in China, export them to the United States, and then import them into China with labels that say “imported from the U.S.”
Due to high medical costs, fake drugs, and poor medical services in China, the Chinese people look for medical treatment overseas. However, they are at risk from being deceived by fake medical services and drugs that are actually a product of corrupt Chinese companies, as seen in the case of Slender Group.
Slender Group is not the only health company that has come under fire for corruption. Recently, Quanjian Group, a traditional Chinese medicine firm, got in trouble for false marketing and was blamed for the death of a 4-year-old girl who had cancer. The firm’s founder, and 17 others involved in the case, were arrested on Jan. 6, according to Reuters.
From The Epoch Times