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Pyramid mastermind jailed for 15 years

THE mastermind behind Beijing's biggest-ever pyramid-selling scheme has been jailed for 15 years for swindling 1.68 billion yuan (US$245.85 million) from more than 20,000 victims.

Zhao Pengyun, 39, the man behind the scam, was also fined 300.34 million yuan, the Beijing No. 2 Intermediate People's Court ruled this morning.

Another 27 prisoners, all legal representatives and general managers from the Yilin Wood Group, received sentences ranging from one to 15 years, the Xinhua news agency reported.

Zhao organized the pyramid scheme with accomplices between April 2004 and June 2006, the court said. He had already been sentenced to one year and 10 months in prison for running an earlier pyramid scheme.

Another two suspects, Zhao Daihong and Tu Xiaobing, legal representatives for the company, were involved in illegal sales worth 94 million yuan and 1.27 billion yuan.

The group promised high returns on the sale of forest land in Beijing and other provinces in China. It used pyramid-selling where one salesperson recruits other salespeople who then recruit others.

They collected 1.68 billion yuan from more than 20,000 victims. Of the 20,000 victims, about 17,000 were in Beijing, media reports said.

The famous actor Ge You was also involved. He returned the 3.59 million yuan he had received for promoting the scheme after a police probe was launched into the scam.

Beijing police had detained 59 managers and key members of the company and seized or frozen assets and illicit gains by June in 2007, previous reports said.
China banned pyramid selling in 1998. Authorities said these schemes had become synonymous with cheating and fraud. These schemes are expanding into poor villages in the west, the government warned.


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