Mighty lure of money turns sour
Victims of an illegal Guangzhou pyramid-selling group with 1,000 members were lured with the slogan 'Money is mighty'.
Officers in the Panyu district who busted the group detained 360 salespeople and 29 members from the group's management on April 21, according to a Xinhua report yesterday. They are reportedly still being held.
The organisation, known as Swan Goose System, lured new members with the promise of large profits.
The group asked would-be salespeople to pay 3,800 yuan to buy its products, which were worth about 400 yuan.
Direct selling was banned by the central government in 1998 for reasons of political control, social stability and a fear of nationwide networks it could not control. The ban was imposed after widespread frauds that victimised members.
Under a World Trade Organisation obligation, China must lift the ban and pass a law on direct selling by the end of this year. Beijing has allowed foreign firms - including Amway and Avon - to continue selling, but only through retail outlets and registered sales staff.