It may seem incredible but Qin Yongjun, who only got as far as a junior high school education, has managed to deceive thousands of college students in a cosmetics marketing scam. This one time farmer turned head of an illegal pyramid selling company himself wonders how he managed to attract so many intellectual followers.
"I had not expected it all to turn out this way. What do you think my sentence will be? Will it be years in prison, life imprisonment or even the death penalty?" sighed Qin, now locked up in yellow prison clothes in Yubei district of Chongqing municipality.
It was June 24 and it had all gone pear shaped for Qin. From September 2003 to March 2004, Qin and his organization enticed more than 2,000 college students into participating in an illegal pyramid selling operation in Chongqing. The students drawn into the scam came from all parts of the country. Some were even whiz kids from the highly prestigious Tsinghua and Peking Universities.
The central government has attached great importance to the case and Premier Wen Jiabao has personally issued instructions urging the authorities to "crack down strictly on illegal pyramid selling activities," and urging the schools to "adopt measures to prevent students from being cheated by and participating in these schemes."
So how did a little known pyramid selling organization, the self-styled French Olymen Cosmetic Co. Ltd., succeed in tempting so many well educated university students into getting involved in its illegal activities in just half a year?
Qin's rapid rise
Qin Yongjun, 38, comes from a farming background in Xiangcheng City of central China's Henan
Province. His education finished when he graduated from junior high school. At the start of 2003, he went to Chongqing and joined the French Olymen Cosmetic Co. Ltd after paying a "registration fee" of 3,350 yuan (about US$400) to buy the cosmetic products. From then on Qin made money through developing new "members". Every time he introduced a new member to the scheme he got 510 yuan (a little over US$60). Altogether he made himself nearly 600,000 yuan (about US$72,500).
Qin confessed that at first he and his associates posed as students of a Xi'an-based college to win the confidence of the university students. Through offering lectures and training activities they persuaded the students that this was a business opportunity which could not fail to make them a lot of money. They told the students what they wanted to hear and let them get on with the work of propagating the scam. Meanwhile Qin found he could get rich quick while others did the work.
Crouching in the corner of a prison cell, Qin looked at the light reflecting on his handcuffs and said quietly, "I'm just an illiterate farmer, I didn't expect it could all develop so smoothly and be attractive to so many college students."
Brainwashed through singing, courting and studying success
As the Olymen Cosmetics Company was in fact operating illegally, its products could not be legally sold on the market.
Its organizational structure was a five-tier hierarchy within which positions were allocated on the basis of the number of "subordinates" who had been persuaded to buy their way into the pyramid. There were "parents" who had brought in 3-9 subordinates, "directors" (10-69) and "managers" (70-399). To become a "general deputy" like Qin, 400 plus subordinates were required.
Li Ping, a junior student at a Hunan-based university described her experience of 'brainwashing':
On the first day, after presenting a lecture on the theme of "success", the instructors brought the students together in a small room to play games. Every member of the group was asked to sing and speak on the stage and had to address the others as "manager".
There was a "courtship" game which involved continuing to propose to a member of the opposite sex until he or she accepted. Li said, "The game is aimed at overcoming feelings of humiliation and diffidence. It's rather provocative."
Over the course of the next few days, the members would be immersed in visualizing the pleasures of the "pursuit of success". They were told of the "theory and practice of direct selling," learning that "direct selling is the forth opportunity that modern China's economic development offered youth." This was typical of the "course" content, which was full of fine sounding but essentially pretentious nonsense like "the poor need no money but ambition".
A vicious circle of recruitment
In order to recoup their own initial investment, each victim who has been recruited to the pyramid must in turn recruit more victims to become his or her subordinates.
Tang Ming was detained as a "manager" in the illegal organization. He had started as a victim himself but before long, like most victims, this dupe became a duper.
"I hate the guts of the people who got me into this!" said Tang.
This particular youngster had gone back to college this March to prepare to make an oral defense of his graduation thesis. But he was arrested several days before he could present his defense because he had been responsible for the recruitment of more than 200 new members into the scam.
"It took me three years to prepare for the entrance examinations to get into university. But now I won't be able to get my degree," said a remorseful Tang.
Tang was once a cadre in the student association of his university in Hubei Province. He persuaded two other students to join the company. One was the Communist Youth League branch secretary at the university. Tang pointed out wryly that if only they had not been such able people he wouldn't be in prison today. One of his "subordinates", the League branch secretary, had succeeded in recruiting more than 100 members for Tang over the past several months.
Supporters of an "evil economic cult"
According to police sources at the Chongqing, Yubei Public Security Bureau, most of the 2,000 or so college students had been so effectively inducted into the scam that even after the operation was exposed as "pyramid" selling they still held to the mistaken belief that it was in fact "direct selling" that they were involved in. They insisted it was a "brilliant cause" and a "new innovation" and compatible with current trends in socio-economic development. And now some of the students have even started it up all over again in the cities of Chengdu and Chongqing and in Hubei Province.
One undercover policeman said, "They seemed to be just bewitched. They would listen attentively at the 'training classes' and in just a few days would have taken down a thick wad of notes."
"With its brainwashing, daily ceremonies and tight organizational structure for exercising control over the individual members, what we are tackling here is nothing less than an evil economic cult," said Chen Ping, director of the Chongqing Public Security Bureau Information Center.
"We can save their bodies, but we cannot save their souls," said one policeman who had taken part in the rescue operation to get the students away from the clutches of the illegal organization.
One student wrote these words on a train after becoming a member, "I have no idea what tomorrow will bring, but right now what I'm facing is a realistic excuse to break free which lies somewhere between hope and desperation. When I look out at the vast green expanse of the open countryside and the distant rolling mountains through the window, I have a sense of the capricious nature of life. Maybe it would be natural for someone to refuse to become a caged spirit. Instead of caution he might instead be eager for challenges and conflict in the unknown. Here on the train my instinct tells me this will change the course of my life."
A psychologist explains
Many people have gotten into pyramid selling through their greed for excessive profits. But with this particular group of college students, could there be other mechanisms at work pushing them into the murky waters of pyramid selling?
Zheng Xiaobian, a psychologist at Huazhong Normal University pointed out that many students were confused by the preaching of "equality" and "friendship". Everyone has a need for recognition and to be cared about by others. For some students these needs were not being satisfied during their time at university.
During the pyramid selling activities, the members were brought together like a single well united family. They all slept on the floor and ate simple communal vegetarian meals. They developed a sense of empathy which led them to depend on each other.
Recruitment was mostly from among those students who were introverted and taciturn. They had few friends and were so gullible that they were often taken in before they were aware of what was happening. As students they seldom felt successful whereas the pyramid selling organization provided them with the illusion of success.
Then there were the motivators of group suggestion and the need to conform to the norms of group behavior. The better educated a person is, the more susceptible he or she will be to such suggestion due to a stronger curiosity and thirst for knowledge.
Lin Shanyuan, section chief of the China University of Geosciences student department, added that the students' lack of religion and limited social experience and the relaxed administrative systems at the universities were also contributing factors.
Illegal pyramid selling or legal direct selling
"Most people still don't know about pyramid selling," said Yang Yu, deputy leader of the Chongqing Public Security Bureau Economic Investigation Team. "The public can't tell the difference between pyramid selling and direct selling. So it's imperative to work at creating the right conditions if society is to protect itself in the fight against pyramid selling activities."
To solve the problem, insiders consider that the crux of the matter lies in the promulgation of new laws on direct sales. Under China's WTO commitments this is scheduled to happen in September of this year. Pyramid selling operators try hard to cover up their unlawful activities by describing them as direct selling. The new legislation should help the public to differentiate between illegal pyramid selling and legal direct selling.
Specific pyramid selling cases involving college students:
On May 29, 2004, the public security department in Xuzhou of eastern Jiangsu Province rescued three students from the China Medical University and Southern Yangtze University in a shock investigation into eight pyramid marketing cells.
On May 19, 2004, Linfen City in central China's Shanxi Province found more than 40 college students among the pyramid sellers when they broke up a pyramid selling operation.
On October 31, 2003, when pyramid selling was exposed in Haikou City of south China's Hainan Province, all 13 operators involved were university students.
On September 9, 2003, Guigang city in southern Guangxi hunted down a pyramid selling ring where some 90 percent of the 500 or so participants were college students.
On August 27, 2003, Hepu County in Guangxi broke up an illegal pyramid selling organization seizing 146 members, most of whom were students.
(China.org.cn by Li Xiao, July 12, 2004)
