6 arrested after $10m pyramid scam raid
Six people were arrested yesterday over a pyramid investment scam that sucked in 1,000 victims and about $10 million through promises of lavish returns.
Police said the case highlighted the need to consider tightening legal controls to curb the rising number of fraudulent pyramid schemes. There have been 15 already this year, compared with four last year and two in 1999.
Kowloon West detectives raided Great Power Universal's shop in Carnavon Road, Tsim Sha Tsui, yesterday and arrested four female staff and a male shareholder. Computers, account books and boxes of beauty and health products were seized.
The six were released on bail of between $5,000 and $10,000. They included a director of the company, surnamed Wong, 35, who surrendered earlier.
Police are still looking for the directors of the company, which has changed its name and operating methods over the past 15 months.
Acting Superintendent Lo Kai-wah said police acted after receiving 10 complaints. Records showed the company recruited about 1,000 members. 'Each of the members is believed to have paid between several thousand to several tens of thousands of dollars to join a pyramid investment scheme,' he said. 'We're still counting the total amount of money involved but the sum could reach as much as $10 million.'
Mr Lo called on other victims to contact police on 2761 2342.
He said police and the Justice Department were discussing whether there was a need to tighten the law.
