Students duped by pyramid scheme

Get-rich-quick cosmetics scam tricks over 2,000

The central government has ordered a crackdown on pyramid schemes after more than 2,000 university students were reportedly lured to Chongqing with the promise of earning quick money.

The students came from universities in Hubei, Henan and Shaanxi, according to reports in the Hubei-based Chutian Metropolis Daily.

They were put to work selling cosmetic products for a company identified as Oliman, which claimed to be a French brand.

Police from Hubei and Chongqing have shut down the scheme and arrested three men from Hunan .

The students, mostly in their final year of study, were found living in harsh conditions in groups of 10 at 120 different locations in Chongqing's Yubei district in March.

They were surviving on vegetable scraps discarded from local markets and sleeping on dirty bedding, the newspaper said.

A reporter covering the story said the students were willing to live in the poor conditions because they thought it was preparing them for their business careers.

The reports said guest speakers convinced the students they could get rich with the scheme, which required them to pay 3,350 yuan for a set of Oliman cosmetics as a membership prerequisite.

Members were said to be able to earn up to 20,000 yuan in three to five months by selling the products and enrolling new members.

The newspaper quoted a public security source as saying that Vice-Premier Wu Yi and Public Security Minister Zhou Yongkang had ordered that university students be educated about the risks of getting involved in pyramid schemes.

Yang Yu , a Chongqing Public Security Bureau spokesman, said the students were sent home after the pyramid network was broken up.

'Pyramid sales are common, but it is unusual for university students to be involved,' he said.

Mr Yang told the China Youth Daily that most of the students came from poor villages.

Xia Xiaoluan, a professor at Peking University's social sciences department, said it was a tragedy that university students had been found taking part in the pyramid scheme.

'Anyone with common sense would know it was a scam,' Professor Xia said.