Han Ximin

ximhan@126.com

FUTIAN police have busted a criminal ring connected with a Hong Kong-based company that allegedly cheated mainlanders out of 200 million yuan (US$29.42 million) through pyramid sales.

A total of 25 suspects including the leader of the DCHL Shenzhen scam network, identified as Da Dong, have been arrested.

This is the first organized pyramid sale scam network that the Futian police have busted in 2017.

A woman, surnamed Jiang, reported to Futian police March 4 that she had been tricked by a man called Da Dong into attending promotional activities organized by DCHL Hong Kong Corp.

Jiang and many other victims were cheated into paying more than 1,000 yuan for trips to Hong Kong to learn about e-commerce businesses. During their stay in Hong Kong, they were taught about products like milk formula and red wine made by DCHL, and brainwashed by being introduced to dealers who had become rich by selling DCHL products.

They would also pick up the victims in luxurious cars to win their trust.

“To show their strength and win the trust of the victims, the company arranged for the investors to attend concerts also attended by stars,” said Liu Gao, deputy chief of Futian’s criminal investigation department.

Unlike traditional pyramid sales scams, they didn’t restrict the freedom of the victims and instead provided accommodations.

After completing the course, which lasted three or fours days and bombarded the victims with the so-called products, the victims were persuaded to pay the 10,000 yuan fee to become dealers for the company.

After they became dealers, the company then divided the victims into different teams to recruit more members, most of whom were family members and friends.

They divided the dealers into seven levels that could be upgraded if they recommended five new victims, each of whom would need to pay a 50,000 yuan admission fee. Some of the victims even borrowed hundreds of thousands of yuan from relatives and friends to upgrade their levels so they could earn more in commissions.

Futian police arrested the 25 suspects in two actions after receiving the reports, and the ring leaders admitted to organizing the victims into joining the pyramid sales network.

The investigation showed that the ring members played different roles, such as business advisers and lecturers, to attract investors and they chose to target people who had suffered setbacks in their family life or business, or those whose main goal was to earn quick money.