Pyramid selling groups are falling afoul of law enforcement
officials with increasing frequency, top officials said.
Officials from the State Administration for Industry and
Commerce (SAIC) and the Ministry of Public Security said on Tuesday
they would jointly wage a month-long campaign against illegal
pyramid selling groups starting on Monday.
Zhong Youping, vice-minister of the SAIC, said pyramid selling
appeared to be on the rise and spreading from prosperous coastal
areas to the less developed western part of the country as well as
other rural areas.
"They often act under the guise of 'direct sales' or 'chain
stores'," he said.
"And their illegal deeds are often connected with illegal
fund-raising and swindling."
The main focus of the campaign is to tackle several large
pyramid selling organizations that cover extensive regions and
involve huge numbers of people and large amounts of money.
Activities like luring people away from where they live and then
restricting their freedom after they join the group and violent
confrontations with government workers will be severely
punished.
Zhong said confrontations between pyramid selling groups and
law-enforcement officials had been intensifying.
He said 54 law-enforcement officers from 13 provinces had been
injured in clashes with members of such groups since the beginning
of last year.
For example, local police and industrial and commerce bureau
staff in Siping, Jilin Province, were besieged and attacked by more
than 140 members of a pyramid selling group during an attempted
crackdown.
Zheng Shaodong, assistant to the minister of public security,
said illegal pyramid selling had absorbed about 40 to 50 billion
yuan ($5.3 billion-$6.6 billion), posing a huge threat to the
country's economic security.
The SAIC reported 15 large cases of pyramid selling last year,
each involving more than 100 million yuan.
The largest one involved a Shandong Province-based group selling
cosmetics. It had members from 20 provinces. The case involved more
than 500,000 people and more than 2 billion yuan.
(China Daily July 12, 2007)