Online pyramid scheme busted in E China

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Police in Shanghai Municipality said Tuesday that they have arrested more than 20 people who allegedly engaged in a large-scale online pyramid scheme.

Police said the ring recruited more than 6,900 members from 28 provincial regions, including Zhejiang, Anhui and Jiangsu.

Earlier this year, local police discovered a company that was involved in illegal fundraising, asking members to pay 3,800 to 15,000 yuan (620 to 2,450 U.S. dollars) for cosmetics or health care products purchased through an e-commerce website, promising them money if they convinced others to join the scheme.

More than 100 million yuan was involved in the case. Most of the money was transferred to personal accounts belonging to a person surnamed Liu, who is also allegedly in charge of the company.

Pyramid selling has been banned in China since 1998 but has remained rife in many regions. In recent years, the fraud has evolved from sales of fake products to more sophisticated fundraising schemes.

• S China busts huge pyramid scheme ring
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