15 tried in largest online pyramid scam in China
Source: Xinhua |
June 19, 2013, Wednesday
|
Print Edition
Print Edition
FIFTEEN people accused of involvement in the nation's largest online pyramid scheme stood trial yesterday in a court in east China's Zhejiang Province.
On June 11, police in Jinhua City busted a website offering discounts on online purchases and arrested Ying Jiancheng and another 14 people suspected of organizing the scam involving 24 billion yuan (US$3.9 billion).
An investigation by prosecutors in Jinhua found that Zhejiang Yijia E-commerce Co Ltd, founded by Ying and three others in May 2010, had been using an e-commerce website to run the pyramid scheme since July 2010.
The website, Wanjia Shopping, initially offered discounts to consumers. But it later asked consumers to buy products at a discount while promising refunds based on the full retail value of the products. The gimmick helped the company recruit more than 1.9 million members across China, leaving it unable to honor its refund commitment.
Top company executives raked in huge profits, with Ying accumulating 3.74 million yuan, according to prosecutors. Outstanding debt for members of the Wanjia Shopping website stood at 773 million yuan when the website was shut down by police.
A verdict will be announced in the future.
On June 11, police in Jinhua City busted a website offering discounts on online purchases and arrested Ying Jiancheng and another 14 people suspected of organizing the scam involving 24 billion yuan (US$3.9 billion).
An investigation by prosecutors in Jinhua found that Zhejiang Yijia E-commerce Co Ltd, founded by Ying and three others in May 2010, had been using an e-commerce website to run the pyramid scheme since July 2010.
The website, Wanjia Shopping, initially offered discounts to consumers. But it later asked consumers to buy products at a discount while promising refunds based on the full retail value of the products. The gimmick helped the company recruit more than 1.9 million members across China, leaving it unable to honor its refund commitment.
Top company executives raked in huge profits, with Ying accumulating 3.74 million yuan, according to prosecutors. Outstanding debt for members of the Wanjia Shopping website stood at 773 million yuan when the website was shut down by police.
A verdict will be announced in the future.
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