Man goes on trial for elaborate pyramid scam
By Li Qian |
December 22, 2012, Saturday
|
Print Edition
Print Edition
THE operator of a popular online shopping mall who was suspected of orchestrating a pyramid sales scam was accused of luring millions of members and billions of yuan during a court trial yesterday in Nanchang, capital of Jiangxi Province.
Tang Qingnan, founder of Jiangxi Better Life Co, had signed up more than 6 million members and 120,000 distributors to www.tpy100.com, an online shopping mall selling everything from clothes and handbags to skin-care and electronic products, media reports said.
He told members to shop themselves or pay a deposit to become distributors, and then invite others to become distributors. Members could move up in levels after more people joined and receive either cash rebates or redemption points for goods, prosecutors said.
An audit showed the website had huge debts and relied on deposits from distributors to stay in business, according to the Oriental Morning Post.
Prosecutors said Tang severely disturbed social economic order.
About 1.1 billion yuan (US$176.5 million) in the company's account was frozen by the Nanchang Public Security Bureau after Tang and seven others were arrested in April on suspicion of organizing a pyramid selling scam, media reports showed.
It was also reported that the company had received 3.79 billion yuan in deposits.
In September, Jiang Guobin, a 47-year-old Shanghai native who had signed up 259 members and earned more than 112,000 yuan, was sentenced to 18 months in prison by Xuhui District People's Court for his role in the scam.
Tang Qingnan, founder of Jiangxi Better Life Co, had signed up more than 6 million members and 120,000 distributors to www.tpy100.com, an online shopping mall selling everything from clothes and handbags to skin-care and electronic products, media reports said.
He told members to shop themselves or pay a deposit to become distributors, and then invite others to become distributors. Members could move up in levels after more people joined and receive either cash rebates or redemption points for goods, prosecutors said.
An audit showed the website had huge debts and relied on deposits from distributors to stay in business, according to the Oriental Morning Post.
Prosecutors said Tang severely disturbed social economic order.
About 1.1 billion yuan (US$176.5 million) in the company's account was frozen by the Nanchang Public Security Bureau after Tang and seven others were arrested in April on suspicion of organizing a pyramid selling scam, media reports showed.
It was also reported that the company had received 3.79 billion yuan in deposits.
In September, Jiang Guobin, a 47-year-old Shanghai native who had signed up 259 members and earned more than 112,000 yuan, was sentenced to 18 months in prison by Xuhui District People's Court for his role in the scam.
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