China police arrest 230 over pyramid scheme


BEIJING, July 31, 2017 (BSS/AFP) – Chinese police have arrested 230 members of a suspected pyramid scheme, a week after a rare demonstration in Beijing protesting a crackdown on the group.

The scheme, known as Shanxinhui or “philanthropic exchange”, is under investigation and the group’s founder Zhang Tianming, along with several employees, was arrested earlier this month.

But in an unusual display of public disobedience, hundreds of protesters affiliated with the scheme gathered in the capital Beijing last Monday and 67 of them were detained.

Photos and videos on social media showed a large group chanting slogans and holding red banners urging President Xi Jinping to stop the investigation into the group, which they described as a legitimate platform being “persecuted”.

Protests of such size are rare in Beijing, where ruling Communist party has little tolerance for public demonstrations and is particularly sensitive to activity in the country’s capital.

On Sunday, the Guangdong public security bureau said on its official social media account that 230 members of the scheme had been arrested, with 142 facing criminal charges.

It added that 55 companies suspected of involvement in the scheme have been put under investigation, and pledged to “maintain the high pressure crackdown”.

Shanxinhui is “the Falun Gong of a new era,” one social media user said Monday, referring to the banned religious group that has been brutally suppressed by the Chinese government for nearly two decades after it staged a major protest in Beijing’s centre.

Shanxinhui registered as a business partaking in “cultural activities” in the southern metropolis of Shenzhen in 2013, Chinese language publication The Paper cited government records as stating.

Its official Weibo microblog account has blank since last week, with no posts shown, and its website is not accessible.

A cached version of the website described the organisation as an equity investment group founded in 2013 that promotes causes such as forestry conservation and poverty alleviation.

As of June, as many as 2.3 million participants had not received a pay-out in the scheme involving billions of yuan, according to Chinese state broadcaster China National Radio.

Founder Zhang and the employees were arrested on charges of defrauding “a huge amount of property” from victims “under the guise of ‘helping the poor and achieving common wealth'”, according to a police statement.

Pyramid schemes have become increasingly popular in China in recent years, with promotional material spreading rapidly on social media networks.

Police investigated 2,826 pyramid scheme cases in 2016, nearly 20 percent more than in 2015, according to the Ministry of Public Security.