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Pyramid schemes cracked

By Zheng Caixiong | China Daily | Updated: 2017-07-11 07:36

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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