Chinese police arrest 230 people following probe into alleged pyramid scheme
Announcement comes a week after thousands of scheme members attend protest gathering in Beijing
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Police in southern China have arrested 230 members of a suspected pyramid scheme, a week after a rare demonstration in Beijing protesting against a crackdown on the group.
The scheme, known as Shanxinhui or “philanthropic exchange”, is under investigation and the group’s founder Zhang Tianming, along with several employees, was arrested earlier this month.
But in an unusual display of public disobedience, hundreds of protesters affiliated with the scheme gathered in the capital Beijing last Monday and 67 of them were detained.
Photos and videos on social media showed a large group chanting slogans and holding red banners urging President Xi Jinping to stop the investigation into the group, which they described as a legitimate platform being “persecuted”.
The Guangdong public security bureau said on its official social media account on Sunday that 230 members of the scheme had been arrested, with 142 facing criminal charges.
It added that 55 companies suspected of involvement in the scheme had been put under investigation, and pledged to “maintain the high pressure crackdown”.
Shanxinhui is “the Falun Gong of a new era,” one social media user said on Monday, referring to the banned religious group that has been brutally suppressed by the Chinese government for nearly two decades after it staged a major protest in the centre of Beijing.
Shanxinhui registered as a business partaking in “cultural activities” in the southern metropolis of Shenzhen in 2013, Chinese-language publication The Paper cited government records as stating.
Its official Weibo microblog account has been blank since last week, with no posts shown, and its website is not accessible.
A cached version of the website described the organisation as an equity investment group founded in 2013 that promotes causes such as forestry conservation and poverty alleviation.
As of June, as many as 2.3 million participants had not received a payout in the scheme involving billions of yuan, according to state broadcaster China National Radio.
Founder Zhang and the employees were arrested on charges of defrauding “a huge amount of property” from victims “under the guise of ‘helping the poor and achieving common wealth’”, according to a police statement.
Pyramid schemes have become increasingly popular in China in recent years, with promotional material spreading rapidly on social media networks.
Police investigated 2,826 pyramid scheme cases in 2016, nearly 20 per cent more than in 2015, according to the Ministry of Public Security.
