Chinese police arrest Koreans in pyramid selling scheme

Chinese police have arrested four Republic of Korea citizens after breaking the first foreign-organized pyramid selling network, seizing more than 13 million yuan (1.6 million US dollars).

The Ministry of Public Security said in a statement Tuesday that the scheme involved about 1,800 people selling cosmetics and sportswear in east China's coastal city Qingdao.

The alleged gang leader, surnamed Lee, and three others established the network in June 2004, requiring each participant to recruit five other people in the level below from whom they took commissions.

In Dec. 2004, the gang also registered a department store and a clothing company, which operated illegally by charging a 2,000 yuan membership fee and offering members a commission to recruit shoppers.

The Qingdao procuratorate is preparing to prosecute the four culprits.

Source: Xinhua