Police recently broke up China’s first WeChat pyramid scheme in Nanjing, Jiangsu province, the first case of its kind seen on the mainland.
According to criEnglish, an investigation found that a man named Chen Zhihua had been using WeChat to mastermind several pyramid schemes and entrap others.
Describing himself as a self-proclaimed “Asian Hypnosis Master,” he promoted his marketing lecture through WeChat, promising that those who listened to his speech could earn large sums of money.
While the lecture itself was free of charge, those wanting to watch it had to pay a membership fee. Commissions were then offered to those who could coax others to join his organisation.
A pyramid scheme is an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.
In China, those involved in pyramid selling rings can face fines and up to five years in prison. The sentence can be extended to more than five years for serious offences. Chen himself was sentenced to prison for eight years and fined 10,000 yuan.
By Dominic Jackson