Pyramid scheme busted with 20 detained

Updated 2017-08-23 09:00:45 Shanghai Daily

A young man who escaped from a gang's den has led to 20 suspects being detained for allegedly running a pyramid scheme.

Shanghai police said yesterday that the scam had gathered over 100 members, aged between 16 and 31, within six months.

They were recruited from out of town over the Internet and then coerced to join the scheme after paying up to tens of thousands of yuan to buy cosmetics that never materialized, police said.

Investigation started this month when one of the members escaped from the gang's den, which was rented apartments in a residential complex in suburban Jinshan District, and reported what was happening to police.

The young man surnamed Li, who is from Jiangxi Province, said he came to Shanghai a few months ago intending to meet a girl who had contacted him on social networks and with whom he had fallen in love, but he ended up being entrapped in the pyramid scheme, according to the police.

Li said he was coerced to buy 16 sets of alleged cosmetic products worth 2,800 yuan (U0) each, using money borrowed from relatives, and then he was asked to bring his friends and relatives into the gang.

In a raid on August 9, when all the members were told to meet in a karaoke bar for profits from the scheme to be distributed, police seized 101 suspects, and a total of 100,000 yuan in cash.

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