Mastermind behind 100 billion yuan pyramid scheme gets 17 years in jail

Zhang Tianming, the mastermind behind a pyramid scheme involving more than 100 billion yuan ($14.5 billion), was sentenced to 17 years in prison and fined 100 million yuan at a court in Yongzhou, Hunan province, on Friday.

Nine other people received jail terms ranging from six months to 10 years plus fines for organizing and leading pyramid schemes, and their illegal gains were confiscated, according to the verdict from in the Shuangpai County People’s Court.

More than 5.98 million people nationwide participated in the scheme, with a total 104 billion yuan involved, the verdict said.

Zhang, 42, founded Shenzhen Shanxinhui Culture Communication Co in the southern metropolis of Shenzhen, Guangdong province, in May 2013. He hired several people to set up a network on the internet for pyramid activities.

They intentionally distorted the country’s targeted policy to eradicate poverty under the guise of helping the poor and building a so-called new economic ecological model. They enticed people to take part in pyramid selling by promising high returns and cheated them out of huge amounts of property, according to previous reports by Xinhua News Agency.

They held training and promotion activities nationwide to develop members, and each participant was required to pay 300 yuan to buy a so-called seed of kindness in the way of membership, according to the court verdict.

Different levels of membership and participants got bonuses based on how many new members they introduced. The payments for members were from the funds invested by new members, instead of the real economy, it said.

While police were probing the case, Zhang incited more than 600 members to protest in public places by holding banners and shouting slogans on June 9 and 10 of 2017, the court verdict said.

The company’s pyramid activities seriously disrupted the social and economic order, and Zhang’s instigation behind the protests constitutes the crime of organizing people to disturb order in public places, according to the verdict.

Zhang was arrested by Hunan police in September 2017, suspected of organizing and leading pyramid retail activities, according to the Ministry of Public Security.

The ministry’s figures show that pyramid schemes have been expanding in recent years. Police investigated 2,826 pyramid scheme cases in 2016, up 19.1 percent over 2015.

The ministry launched a campaign last year against financial crimes that raise money from the public, including pyramid schemes, in a bid to safeguard economic security and social stability.