HK resident charged in pyramid scheme

PUBLISHED : Wednesday, 03 September, 2008, 12:00am
UPDATED : Wednesday, 03 September, 2008, 12:00am

A Hong Kong resident has been charged with conducting 'illegal business activities' by a Nanning court for her role in a pyramid sales scheme in Guangxi , state media reported yesterday.

The Nanning Municipal People's Prosecutors' Office said Bin Sau-ying of Hong Kong, American-Chinese businessman Wang Xianjin and 19 mainlanders were involved in illegally collecting funds totalling more than 20 million yuan (HK$22.9 million) through a pyramid scheme in Nanning and Guigang from 2006 to the end of last year, the China News Service reported.

It said the trial began on Monday and was expected to end tomorrow.

Bin and the 20 other defendants make up one of five groups of people being tried over the popular Beibu Gulf Development Pyramid Scheme.

It was set up by Lin Yueguang, an Australian-Chinese businessman, and others. It used the Beibu Gulf Development Project started by the municipal government in Beihai as a signboard to engage people who had interest in investing in the city.

Key members of the scam claimed that they had been entrusted by senior officials in Beijing and the Beihai municipal government to raise funds because the government lacked capital. The scheme encouraged each new member to invest 69,800 yuan to become a 'branch director' to recruit subordinates.

Earlier reports said Lin and his key subordinates enlisted people to pretend to be relatives of central government officials and even Beihai's vice-mayor to deceive new members.

Their tactics drew at least 1,800 recruits, including Hong Kong and Macau residents, retired provincial officials, veterans and Hainan entrepreneurs, amassing more than 100 million yuan, Xinhua said.

One of the key leaders Lin recruited was Cheung Yu-kuen, president of the Macau Putonghua Council, Xinhua said. Besides her, three other Macau residents are involved in the case.

Police busted the scam in May and arrested 158 people, China News Service said.

Pyramid sales schemes have been rampant in cities such as Nanning, Beihai and Guilin since 2004 after Guangdong police busted them, forcing many swindlers to move to neighbouring regions.