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)
