Four Hong Kong citizens arrested by police in the Guangdong city of Shaoguan for running a pyramid-selling scheme have been jailed for up to six years, official media reported.
Two of the four Hongkongers are a couple, whom Shaoguan police referred as Pak "X" Man and Cheng "X" Fai. Each received six years' imprisonment, the Guangzhou Daily reported.
It said the pair were leaders of the city's biggest pyramid scheme organisation under the auspices of the Hong Kong-based Digital Crown Holdings Limited (DCHL).
They were said to have recruited 1,241 members, and the scheme involved more than 68 million yuan (HK$85 million) of capital since 2009 to last year.
A former member who organised a self-help group for former DCHL distributors said the couple's full names were Pak Si-man and Cheng Chi-fai.
"All the four Hongkongers are natives of Shaoguan, but moved to Hong Kong a few years ago," said the volunteer, who gave only his surname, Peng.
He added that pyramid scheme activities in Guangdong had been reduced since local authorities launched a crackdown last year.
The two other Hongkongers, referred to by local police as Cheung "X" Ying and Leung "X" Ha, and another 10 mainland-based DCHL senior contributors received sentences ranging from two and a half to six years, the daily added. The newspaper said the Zhenjiang district court also fined them between 300,000 and 100,000 yuan each.
All 14 DCHL key distributors in Shaoguan were arrested by the city's police on August 14 last year, the China News Service said.
The 14 defendants had started recruiting mainland members by luring them to start "big businesses" through buying DCHL products such as essential oils, beauty products, red wine and health supplements, as well as organising product promotions and training courses in Hong Kong, Dongguan, Huadu and other cites in 2009, the Guangzhou Daily reported.
DCHL has claimed it is not running pyramid schemes, but a complicated multi-level marketing business - with distributors being divided into the levels of baron, count, marquis, duke, archduke and majesty duke.
The highest rank is allegedly able to receive up to 42 per cent of profits, according to a DCHL contract.
It was not clear whether the defendants had appealed as the court yesterday refused to give more detail for hearings.
The DCHL management did not reply to inquiries yesterday.