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Pyramid scheme suspect held
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A 65-year-old Shanghai woman has been arrested on suspicion of running a pyramid scheme that swindled more than 5,000 people out of 500,000 yuan (US$81,600), police said yesterday.
The suspect, surnamed Lu, came up with the idea for the scheme after working for several years for a US-based Internet marketing company.
Her job was to review online advertisements, for which she was paid points that could later be redeemed for amazon.com gift certificates. Lu, however, became unhappy with her remuneration and decided to take matters into her own hands.
Using the US firm as a model, Lu set up a website that offered people the chance to earn gift certificates by clicking online adverts.
Unlike her former employer, Lu charged new recruits an enrolment fee of between US$1,000 and US$10,000, then encouraged them to recruit more people using the same principle, police said.
Between 2009 and June 2014, Lu attracted more than 5,000 members and collected more than 500,000 yuan in enrolment fees, they said.
Police were made aware of the scheme in June after receiving a tip-off from the Ministry of Public Security. Lu and five of her associates — all of whom are aged over 55 — were subsequently arrested.
Between February and July, Shanghai police cracked 10 pyramid schemes involving 60 people and 150 million yuan.
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