China police crack country’s biggest pyramid scam – Reuters

From Reuters:

Police in China have cracked the country’s largest pyramid scam, a cosmetics-sales scheme involving hundreds of thousands of people across the country, local media reported on Friday.

Police in Liaocheng, in eastern Shandong province, uncovered the 2 billion yuan ($253 million) network after a member provided a list of names that led to the arrest of three ringleaders and the discovery of a database of 326,000 salespeople and 400 “senior members”, the South China Morning Post said.

The scam, which involved each member paying thousands of yuan for the right to sell cosmetics, was led by a 30-year-old Ph.D.-holder who had developed marketing models and software to manage the network, the paper said. [Full Text]

Read background information on ” Pyramid Sales in China” from CRI, talking about the Pyramid Scheme, China’s Direct Selling Policy, and etc.