Health care and pharmaceuticals

An environmental protection association, a pyramid scheme, and a 5,000-RMB miracle pill

JDM101026shzhwb.jpg
Shenzhen Evening News, October 26, 2010

The green capsule inside a plastic shell on the front cover of today’s Shenzhen Evening News is a wonder drug.

The miracle pill is marketed by the World Environmental Protection Association (世界环保协会), which claims that it can cure everything from diabetes to cancer. Such a powerful drug doesn’t come cheap: each dose is priced at 5,000 RMB.

But there’s good news: if you join WEPA, you’ll be able to buy it for just 500 RMB.

According to the Shenzhen Evening News, WEPA distributes the pills, which are not approved by state drug authorities, through a multi-level marketing network headquartered in Shenzhen. The drug discount is the initial attraction, but members get hooked by the thought of sharing in the proceeds from the Association’s multi-billion-yuan investments.

In fact, in June, before Shenzhen authorities launched their investigation into WEPA, the paper published a thinly-disguised press release announcing that the organization had signed nearly 10 billion RMB worth of investment contracts in areas such as biofuel, wind power, and natural gas. Perhaps the prominence of today’s take-down is meant to make up for the paper’s earlier lapse in judgment.

Miraculous Medicine
500 per dose for members; 5,000 for non-members

by Gao Shenxian / SEN
  • The peculiar World Environmental Protection Association has the mission, “Save China, Save the Globe”, but if you want to buy miraculous resurrection pills, you must join up
  • Many WEPA members complained to this newspaper: The medicine is an unlicensed fake. WEPA claims to possess enormous capital and has used the promise of profit sharing to fool members into paying tens of thousands for management positions

The organization says that its aim is to “save China and save the globe.” The World Environmental Protection Association hoists the banner of environmental protection and declares “First, the internal environment, and then the external environmental.”

“Internal” environmental protection refers to using a capsule of traditional medicine provided by the Association. The unlicensed drug is said to possess the ability to raise the dead. For ordinary consumers, it costs 5,000 RMB per dose.

However, the drug is just a supplement. The real focus is WEPA membership, which allows members to obtain this cure-all for just 500 RMB per capsule.

Then WEPA attracted crowds of members with promises of investments in the hundreds of millions, billions, and even tens of billions. Yet those promises fell through once members from across the country spent hundreds of thousands of RMB for their branch director titles; following WEPA’s “discussions with the government about investment,” its promises evaporated, and investors have seen no returns. Branch directors discovered a cleverly-disguised trap, a scam from start to finish.

The organization has located is “global headquarters” in Shenzhen, and many locals and out-of-towners have voiced their complaints to this newspaper. Our reporter discovered that this organization, which claims environmental protection as its mission, is chasing after funds and has begun using the same multi-level marketing techniques to peddle its tonic in other regions…

1.
An unlicensed, fake drug that claims to be a cure-all
Price is expensive indeed

Shenzhen resident Sun Ying sat across from this reporter holding a capsule inside a plastic shell. She said that this ordinary-looking drug possessed the miraculous ability to cure all illnesses, and that it could bring the dead back to life. But it cost 500 RMB, and that was the “member price.”

That Chinese medicine capsule came recommended by the World Environmental Protection Association. By joining the WEPA, you would be given one free dose. Becoming a member was as simple as filling out a form and handing over the money. The medicine was, according to the WEPA, “internal environmental protection”: taking it would “purge toxins from the body, thereby clearing up illnesses without the need for treatment, thus achieving the goal of a single cure for different diseases.”

A pile of photocopied guides to the drug explained the curative effects of the medicine: from complexion to cancer, there was nothing it could not treat. And a number of individual cases were cited in the two-page guide: “After two to three courses, hemiplegia patients could abandon their canes, get up from their wheelchairs, and walk about, able to take care of themselves. Comatose patients, after taking one to five courses, showed responses: previously-immobile tongues could be extended to eat porridge. After five courses, facial features and bodily organs had five to eighteen years shaved off their age.”

Sun Ying said that members could purchase the medicine for 500 RMB per capsule. The cost for non-members was 5,000 RMB!

The “Guide” put it this way: “This prescription is the product of a secret 300-year-old ‘resurrection’ formula refined with modern biotechnology.”

Consumers complained to this newspaper, saying that the “medicine” recommended and sold by the WEPA was accompanied only by the photocopied Guide, which did not include any permit number or factory address, making them unregistered drugs. An employee of the Shenzhen Municipal Drug Administration told this newspaper that if a drug lacked a nationally-approved production registration, it was undoubtedly a fake.

2
“World Environmental Protection Association”
Strange identity, no approval or paperwork

In the words of WEPA president Zhong Huanhui (钟焕辉), “If a patient one day from death took a single capsule, he would not die.”

So what sort of non-governmental organization is the World Environmental Protection Association, and how is it organized? According to the Association’s promotional materials, “WEPA was founded in 2004 in Guam, USA, as a global organization devoted to saving the earth.” This reporter called up the State Environmental Protection Administration and the Civil Affairs Administration, neither of which had heard of the organization.

So what is it really? A photocopy of the organization’s English-language registration documents, provided to this reporter by a disgruntled consumer, show that the WEPA was established in the Maldives, not in Guam.

A staffer at the registration office of the Shenzhen Municipal Nongovernmental Institutions Administration, when informed by this reporter that WEPA was headquartered in Luohu District, was perplexed: “If this is an overseas non-governmental organization, it must first be approved by the Ministry of Civil Affairs before setting up an office.”

During this newspaper’s investigation, many WEPA members in Shenzhen said that the institution is currently an illegal organization: it does not have any certification paperwork or an operating license.” A Mr. Zhang, who once served as secretary general of WEPA, said, “It never obtained any national or local permits, but it engaged in a variety of operations, which must have been illegal activities. I spent some time inside, but then I got out – didn’t want to get mixed up in that stuff.”

On August 31, the Luohu District branch of the Shenzhen Municipal Department of Market Supervision investigated WEPA. In the written record of his questioning, Zhong Huanhui said that they had never filed any registration or enrollment paperwork on the mainland. Because the WEPA was suspected of doing business without a license, it is still under investigation.

3
Drug vendors become branch heads
Pale lips and upset stomach after taking the wonder-drug

It boasts that it is a cure-all, but what are its actual effects? Sun Ying told this reporter that she bought twenty capsules through an acquaintance. “I wanted to buy them for my mother, but after I took one myself, I had an upset stomach, and my lips, which had been a healthy red, turned pale while I was taking the drug and for a while afterward. Later I heard that the drug was unregistered, so I stopped taking it. When I tried to return fifteen capsules, they them back for a little over 200 yuan apiece and gave me a total of a bit more than 3,000 RMB. I’d spent 10,500 RMB buying them.”

She said that when she bought the “medicine,” she was granted the title “branch director.” “When they learned that my hometown was Ningbo, Zhejiang, president Zhong Huanhui actively recommended me for director, saying that in the future I’d reap great rewards through profit sharing. So I spend 6,000 RMB to gain the position.”

This newspaper found that a prospective medicine purchaser could obtain free drugs by joining WEPA or becoming a branch director. This was WEPA’s so-called “internal environmental protection”: “Taking it will purge the body of toxins and would have many additional benefits.”

Others interviewed by this newspaper said that they sometimes felt fine after taking the capsules: “Diarrhea is one way to purge toxins.” But the miraculous medicine did not please everyone, and some of them complained to the government. On July 29, after the Drug Administration had dispatched enforcement personnel to investigate, Zhong Huanhui declared that all of the medicine was for his own personal use and was not for sale. An Administration document seen by the newspaper said, “No stock of medicine or health supplements were discovered at the scene. No sales records were found.”

This situation, said Mr. Ma, another WEPA member, was due to the fact that no receipts were issued for any payments. Drugs were sold, but the emphasis was more on investment, “Because Zhong Huanhui said that WEPA could invest hundreds of millions, or billions, or even ten billion, and we would share the profits. This motivated many people, and a lot of them later became branch directors at the price of hundreds of thousands of RMB.”

4
A supplier for an unregistered, fake drug
A claimed price of 200 per unit

Once they enrolled, members could sell the drug to others and would receive a 40% commission. So where did this “traditional remedy” come from? WEPA members could not say. On October 23, a Mrs. Deng told a reporter during a sales pitch, “A lot of this medicine is sold to the elderly.” Although she initially said the drug was wonderful, Deng later said, “Forget it. This stuff is unregistered medicine. Don’t buy it.”

Through various channels, this newspaper was able to locate WEPA’s supplier, a Ms. Chen, who said, “These drugs are made in the mountains from precious medicinal herbs.” Ms. Chen was in charge of sales for Shenzhen and supplied 5,000 capsules to WEPA each month at a price of 200 RMB. “We’ve been working together for more than a year. They have an excellent sales platform, and their membership extends across the country, so in the future, they’ll take more than 10,000 units a month.”

A number of members disclosed that the wholesale price of the drug was just 15 RMB per capsule. Ms. Chen said, “That’s a really low price. I’ll take as many as you have.”

5
The president emerges
“A TCM Family from Taiwan”?

On October 24, this reporter visited Room 311 in the north tower of the International Building on Jiabing Road in Luohu District, which was the WEPA’s location in Shenzhen. Upon entering at three o’clock in the afternoon, there were a number of seniors waiting for checkups from Zhong Huanhui. The president, who claims to come from a family of traditional medicine practitioners on Taiwan, seemed to be in good spirits. He was of average height and was wearing a green shirt emblazoned with the words “World Economic Protection Association.” The reporter asked whether his medicine would totally eradicate a diabetes patient’s condition, he replied, of course it would. He said that when the medicine is taken, it would automatically locate the illness in the patient’s body, and thus it could cure all sorts of illnesses. He also said that the drug was produced in Hong Kong.

Then he said that curing diabetes completely would require 36 doses. If you joined WEPA, the cost would be 500 RMB per capsule, for a total of 18,000 RMB. If you did not join WEPA, each capsule would be 5,000 RMB. The reporter inquired whether joining the association had any other benefits. He said, “We invest in a lot of different projects and we have tens of billions in capital. If you find a project, we can invest, and you’ll receive a 40% share of the profits. You’ll be rich.” Then Zhong Huanhui said that their projects were proceeding quite well. When the reporter inquired how much it cost to become a provincial-level representative, he said, “It’s gone up. It’s now 180,000 RMB. But we won’t give you a receipt. It’d be a donation. We have never issued receipts.”

Then he had an assistant take the reporter to file membership paperwork, but the reporter declined, saying that he would have to think it over.

(Some of the names of sources have been changed.)

Links and Sources
China Media Timeline
Major media events over the last three decades
Danwei Model Workers
The latest recommended blogs and new media
laomo2010x80.jpg
From 2008
Front Page of the Day
A different newspaper every weekday
From the Vault
Classic Danwei posts
+ Culture and corporate propaganda in Soho Xiaobao (2007.11): Mid-2007 issues of Soho Xiaobao (SOHO小报), illustrating the complicated identity of in-house magazines run by real estate companies.
+ Internet executives complain about excessive Net censorship (2010.03): Internet executives complain about excessive Net censorship at an officially sanctioned meeting in Shenzhen.
+ Crowd-sourced cheating on the 2010 gaokao (2010.06): A student in Sichuan seeks help with the ancient Chinese section of this year's college entrance exam -- while the test is going on!
Danwei Archives