China’s latest crackdown on pyramid schemes was prompted by three shocking deaths: one young man who was beaten, another who was found dead in a pond and a third left to die on a road.
Like elsewhere in the world, the scams have proliferated in China as fraudsters trick people into thinking they can become rich quickly.
Members are charged a joining fee and required to recruit new investors with promises of high returns.
Photo: AFP
However, the three deaths in July put a spotlight on more extreme tactics used by some organizations in China, where the schemes can raise large amounts of money.
Warning that pyramid schemes have become “more rampant,” four Chinese government agencies responded last month by launching a three-month crackdown that targets misleading online job adverts designed to lure young people.
Many of those who sign up online to promises of easy riches discover a harsh reality in which they are faced with intense demands, harassment or even physical abuse.
Pyramid schemes in China were criminalized in 2005, but are still booming, with authorities investigating more than 2,800 cases last year, a 20 percent increase from 2015.
An official from the government’s anti-pyramid scheme department said that there are “too many” scams and investigating them requires a lot of resources.
“Especially nowadays, many pyramid scheme organizations move their base to the countryside and develop members through the Internet, making it harder to monitor them and obtain evidence,” the official said.
In a surprising additional challenge, hundreds of members of a pyramid scheme in July held a demonstration in Beijing to protest against an investigation into their group, known as Shanxinhui (善心匯) or “philanthropic exchange.”
Scores have been detained.
Many pyramid schemes operate in cramped spaces where people eat together and sleep on the floor, said Li Xu (李旭), the founder of an organization that rescues people who become trapped.
The organizations that resort to violence do so to intimidate members into not reporting them to the police, he said, adding that the crackdowns have made it more difficult to recruit people.
“They are also afraid that newcomers will call the police. So they take away their mobile phone, control the newcomers by illegal detention and other violent means in order keep more people,” he said.
Li formed the China Anti-Pyramid Promotional Association after he was fooled into joining one himself more than a decade ago.
“Pyramid schemes in China target people who desire to change their life at a low cost,” he said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary