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Smash Ponzi racket targeting homebuyers

China Daily | Updated: 2016-12-13 07:33

A NEW TYPE of multilevel investment scheme has emerged in Yanjiao, a town in Hebei province to the southeast of Beijing. Slightly different from pyramid schemes, the new one is a shell company encouraging households to invest 49,800 yuan ($7,500) for promised returns of up to 4.5 million yuan. Such an offer could easily entice people into a trap. The Beijing News commented on Monday:

Although the new multilevel investment scheme claims to be different from Ponzi schemes, it is essentially no different from the ploys used by fraudsters earlier to cheat people out of their hard-earned money.

Yanjiao is about 33 kilometers from the Central Business District of Beijing and an important point on the development plan for Beijing-Tianjin-Hebei integrated area. So such pyramid schemes will not only undermine the social order of Yanjiao, but can also affect the security of Beijing.

Many online posts say that since innumerable commuters pass through Yanjiao every day to reach Beijing or on their way back home, they could fall prey to such schemes thanks to the enticing promotions.

Media reports say it's the convenient location of Yanjiao-next to Beijing and with low rent-that has drawn the fraudsters to the area. Police, according to reports, have taken action to clear the pyramid schemes and arrest the operators. In fact, police claim to have arrested the main leaders.

But surprisingly the Ponzi scheme still seems to be running. More concerted action is needed to root out this fraudulent scheme and protect people from harm.

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