In Depth: Preventive Health Care Under the Microscope After Vast Alleged Fraud

[para. 1] In a major legal scandal, dozens of employees from Ruide Youth (Zhuhai) Health Management Co. Ltd. (Ruide Health), a preventive health care provider, face charges of fraud involving hundreds of millions of dollars. If found guilty, they could receive severe prison sentences, potentially life imprisonment. [para. 2][para. 3] The employees allegedly duped thousands of clients by exaggerating the benefits of medical devices and altering test results, according to prosecutors from Henan province. The issue came to light after Wang Ping, a 63-year-old retiree, spent nearly $90,000 on ineffective treatments following a misleading health test.

[para. 4] Wang was warned that her health would deteriorate into cancer within six months if she did not undergo Ruide Health's preventive treatment, which did not yield results as advertised. The treatments, touted for their cancer detection and elimination efficacy, were reportedly ineffective. [para. 5][para. 6] After Wang reported her experience to the police in September 2022, authorities alleged that Ruide Health swindled customers out of more than 1.3 billion yuan ($179 million) between May 2018 and September 2022. Twenty-five company affiliates, including its founder, faced trials from August to November.

[para. 7] Ruide’s founder claimed innocence, maintaining that the company provided legitimate services. Defense attorneys supported this by affirming that their products met the expectations set by the manufacturers’ promotional materials and suggested that the accusations represented civil issues or administrative breaches rather than criminal fraud. [para. 8] As China's elderly population grows, it has become a prime market for preventive health, but lax regulations around claims and pricing leave consumers vulnerable to deception, as seen in Wang Ping's case.

[para. 9][para. 10][para. 11] Recommended a free health test at a beauty salon, Wang was persuaded under “intimidation and inducement” to travel to Zhuhai for expensive treatments. These included stem cell therapy and rehab stays, costing her a total of 645,000 yuan. Prosecutors accused Ruide Health of targeting older women through beauty salon partnerships, offering misleading health tests and exaggerated health threats to push high-priced packages.

[para. 12] The defense noted that creating customer urgency is common in the preventive health care sector, part of a strategy to “prevent diseases before they occur.” Also, 61 of the 62 complainants settled with Ruide and signed statements denying deception after police intervention, though prosecutors countered that police only conducted routine notifications. [para. 13] Courtroom discussions also debated the efficacy and exaggerated claims concerning the imported medical devices Ruide used.

[para. 14][para. 15] Discrepancies emerged between the devices’ registered usages — as certified by regulatory authorities — and their claimed benefits in Ruide’s marketing materials. A device branded as the “German Fever Immunotherapy System” was cited, with Ruide claiming it eliminated early-stage cancer cells, which lack scientific validation. [para. 16] Experts clarified that cancer treatment necessitates precisely controlled conditions, and without cancer, such procedures provide no benefit.

[para. 17] The defense countered that marketing claims aligned with manufacturers’ provided details, and use for treating cancer was shared, though slightly exaggerated by Ruide Health. [para. 18][para. 19] Accusations included altering test reports, allegedly fabricating health hazards to drive sales of expensive treatments. [para. 20][para. 21] An important legal question centers on whether the actions of Ruide constitute criminal fraud or are civil or administrative issues.

[para. 22][para. 23] Legal experts, like Tsinghua University's Lao Dongyan, stressed that differentiating civil from criminal fraud depends on the perpetration intent and the market value of the services provided. The defense argued the matter could be settled civilly, citing that some customers expressed satisfaction with Ruide’s services, and agreements were reached with dissastified clients. [para. 24] Of the many alleged victims, nearly half declared no deception occurred in written statements.