Chinese police arrest key members of pyramid scheme

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BEIJING -- Several key members of Shanxinhui, a company suspected of organizing and leading a pyramid scheme, have been arrested in Yongzhou in central China's Hunan Province, police announced Monday.

Several key members, including Zhang Tianming, the mastermind of Shanxinhui, are suspected of obtaining illegal gains of more than 2.2 billion yuan (337.22 million US dollars), according to the Ministry of Public Security.

The suspects intentionally distorted the country's targeted policy to eradicate poverty under the guise of helping the poor and building a so-called "new economic ecological model," while setting up a network on the Internet, the ministry said in a statement.

Shanxinhui allegedly enticed people to take part in pyramid selling by promising "high returns" and cheated them out of huge amounts of property, severely disrupting economic and social order, it added.

The ministry said it would maintain pressure on curbing pyramid selling to safeguard people's interests.

Zhang, 42, founded Shenzhen Shanxinhui Culture Communication Co. Ltd. in south China's Shenzhen in May 2013, and Hainan Shanxinhui in May 2016.

Pyramid schemes have been expanding widely through social networks in recent years.

Police investigated 2,826 pyramid scheme cases in 2016, 19.1 percent more than that in 2015, the ministry's figures showed.