Pyramid schemes rampant in China
13 June 2007
More than 16,000 people were arrested in China for suspected involvement in pyramid schemes in 2006, the Chinese Ministry of Public Security (MPS) announced on Tuesday, according to Xinhua (in Chinese). The MPS said funds of US$87.3 million relating to 1,915 pyramid selling cases had been frozen. In 2006, China investigated a total of 2,081 pyramid selling cases with over US$1.3 billion involved. Pyramid selling, though legal in some countries, has been banned in China since 1998. Authorities said such schemes had become synonymous with cheating and fraud. People found guilty of organizing and running pyramid schemes involving a large number of people face prison terms of at least five years in China and can be ordered to repay up to five times the profits generated by their illegal business operations.