POLICE recently busted a WeChat pyramid scheme in Nanjing City, East China’s Jiangsu Province. This is the first case of its kind that busted in China.

    An investigation by police in Nanjing found a man named Chen Zhihua had been using WeChat, a popular instant messaging application in China, to organize pyramid schemes and involve others in the illegal business.

    Chen, described himself as “Asian Hypnosis Master,” and promoted his marketing lecture through WeChat, claiming one could make large sums of money by listening to his speech.

    The lecture itself is free of charge but one who wants to attend the lecture needs to first pay an amount of money to become a member of Chen’s group.

    Chen then promised participants commission if they could coax others to join the scheme.

    According to the police, Chen recruited 329 members and illegally raised 4.61 million yuan (US$ 754,119).

    A pyramid scheme is a non-sustainable business model that involves promising participants payment primarily for recruiting other people into the scheme, rather than providing any real investment or sale of products to the public.

    In China, those involved in pyramid scheme could face fines and up to five years in prison, and prison terms could also be extended to more than five years in serious cases.

    Chen has been sentenced to a prison term of 8 years and a fine of 10,000 yuan.

    (SD-Agencies)