Pyramid scam ringleader convicted
A Chinese man who masterminded a pyramid scheme that lost investors a total of $246m (£170m)
has been sentenced to 15 years in jail.
Zhao Pengyun was described by Chinese media as the “main culprit” in the scam that left 20,000 people out of pocket.
Pyramid schemes were banned in China in 1998, but a recent report described the practice as “rampant” in some areas.
Most of the victims were from Beijing, and the scam has been described as the city’s biggest ever pyramid scheme.
Investors were promised high returns on parcels of forest land.
But salespeople recruited other salespeople, who in turn recruited more; the investments were worthless.
A total of 28 people involved in the scam have been given jail terms ranging from one to 15 years.
The ringleader, Zhao Pengyun, has been fined $44m (£30m) in addition to his jail term.
As the economy slows down, China has increased efforts to prevent unemployed graduates and migrant workers getting caught up in such scams.
The country’s leaders fear that when large numbers of people lose money to fraud on this kind of scale, it increases the chances of social unrest.