Pyra­mid schemes cracked

China Daily (Hong Kong) - - CHINA - By ZHENG CAIXIONG in Guangzhou zheng­caix­iong@ chi­nadaily.com.cn

Po­lice across Guang­dong de­tained more than 280 sus­pects in a crack­down on il­le­gal pyra­mid schemes in mid-June, ac­cord­ing to a se­nior po­lice of­fi­cer on Mon­day.

“Po­lice busted more than 70 se­cret pyra­mid sales dens in the spe­cial cam­paign code-named Jufeng-23, which was launched si­mul­ta­ne­ously in 16 Guang­dong cities,” said Wu Wuqiang, deputy di­rec­tor of the Guang­dong Public Se­cu­rity Bureau’s eco­nomic crim­i­nal in­ves­ti­ga­tion divi­sion.

“Mean­while, po­lice seized a large num­ber of com­put­ers, bank cards and mo­bile phones used in pyra­mid sales af­ter crack­ing more than 50 cases in­volv­ing more than 1 bil­lion yuan ($146 mil­lion),” Wu told a news con­fer­ence.

In a spe­cial op­er­a­tion launched in 14 Guang­dong cities at the same time, po­lice de­tained 200 sus­pects in what they said was a ma­jor pyra­mid sales op­er­a­tion. A spe­cial task force was im­me­di­ately set up to fo­cus on in­ves­ti­gat­ing the case af­ter po­lice re­ceived re­ports from res­i­dents in March.

The scam­mers pre­tended to be part of a cen­tral gov­ern­ment ef­fort to raise funds for eco­nomic de­vel­op­ment in the vast south­west­ern China re­gion, po­lice said, adding that the group asked each new mem­ber to first pay 69,800 yuan to par­tic­i­pate in the scheme and promis­ing that ev­ery mem­ber would get a re­fund of 19,800 yuan a month later.

Mean­while the mem­bers would get a com­mis­sion of 6,000 yuan once they brought in a subor­di­nate mem­ber, tar­gets were told.

More than 400 peo­ple were found to have been vic­tim­ized by the scheme, po­lice said. Wu said he be­lieved Jufeng-23 had dealt a heavy blow to the pyra­mid schemes that were ac­tive in the prov­ince, one of the coun­try’s eco­nomic pow­er­houses.

De­spite the achieve­ment, Wu said, the po­lice will never lower their vig­i­lance in fight­ing pyra­mid schemes.

He hinted that more spe­cial op­er­a­tions will be launched in the months ahead in co­op­er­a­tion with banks, the lo­cal ad­min­is­tra­tion of in­dus­try and com­merce, the China Bank­ing Reg­u­la­tory Com­mis­sion and re­lated de­part­ments.

The Guang­dong po­lice have in­ves­ti­gated more than 160 cases in­volv­ing pyra­mid schemes (up 36.7 per­cent, year-on-year) and de­tained 950 sus­pects (up 128 per­cent) in the first half of the year.

The cases in the first six months in­volved more than 20 bil­lion yuan, the au­thor­i­ties said.

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