Shandong police have cracked China's biggest online pyramid
sales scam, which involved 170,000 people and 1.36 billion yuan
(US$180 million), the People's Daily reported today.
Prosecutors have accused two suspects, Wei Lixin and Chen Yong,
with running the pyramid selling scam, the report said.
An unnamed resident told the Industrial and Commercial Bureau in
Taian City in May that someone persuaded him to invest 8,000 yuan
in a "Swiss Mutual Fund" and promised a 400,000-yuan return after
30 months, the report said.
Taian law enforcement department found the so-called "Swiss
Mutual Fund" was never registered with the China Securities
Regulatory Commission, the Ministry of Civil Affairs or China's
central bank, the report said.
After investigation, local authorities found the participants
earned money by drawing profits from lower-level participants,
which is the same mode of pyramid selling, the report said.
The suspects confessed that they charged 8,000 yuan from each
person and the sum totaled 1.36 billion yuan, the report
said.
China's Ministry of Public Security busted more than 17,000 illegal
pyramid schemes worth 10 billion yuan in the first half of this
year, and about 16,000 suspects were caught.
(Shanghai Daily August 30, 2007)
