Zhang Ting and her husband involved in pyramid scheme, assets frozen for 600 million yuan
Compiled from The Paper
Case review
Early on the 29th, news that the company of Zhang Ting and her husband was investigated for suspected pyramid schemes topped Weibo trending searches. According to media reports, the Yuhua District Market Supervision Administration in Shijiazhuang revealed that Shanghai Darwei Trading Co., Ltd. is under investigation for allegedly engaging in pyramid scheme activities online.
In response, TST Court Mi Mi responded on its official Weibo in the early morning of the 29th, stating that Shanghai Darway is a legally operated company, and since its establishment, it has always followed government guidance, adhered to legal operations, and paid taxes according to the law. We are very grateful to the government of Shijiazhuang, Hebei, for guiding the company in risk inspection. Currently, the company's operations are normal, and the company will actively cooperate with the relevant departments.
On December 24, a WeChat public account posted an article stating that it had received a reply from the Yuhua District Market Supervision Administration of Shijiazhuang regarding a verification letter. The reply stated that, based on multiple public reports and investigations, on June 5, 2021, the bureau launched a case investigation into Shanghai Dalwei for suspected pyramid schemes and reported it to higher authorities step by step. The Yuhua District Market Supervision Administration of Shijiazhuang replied that, because Shanghai Dalwei used financial institutions to transfer or conceal funds related to the pyramid scheme, the bureau has lawfully applied to the People's Court for preservation measures. The case is currently under further investigation. According to relevant personnel from the Yuhua District Market Supervision Administration of Shijiazhuang, the funds frozen this time amounted to as much as 600 million yuan (frozen in two installments: 300 million yuan by the main company and 300 million yuan frozen from certain agents and team leaders).
"Criminal Law of the People's Republic of China"
Article 224-1: The crime of organizing and leading pyramid schemes
Whoever organizes or leads pyramid schemes under the guise of selling goods or providing services, requiring participants to pay fees or purchase goods or services to obtain membership, forming a hierarchical structure based on a certain order, directly or indirectly using the number of people recruited as the basis for calculating commissions or rebates, inducing or coercing participants to continue recruiting others, defrauding property, and disrupting economic and social order, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and shall also be fined; if the circumstances are serious, the offender shall be sentenced to fixed-term imprisonment of not less than five years and shall also be fined.
[1] The author's perspective
Online pyramid schemes and traditional pyramid schemes have the same essence, but the former differs in that it takes advantage of the virtual and deceptive nature of the internet. The internet is a virtual space, and illegal pyramid schemers use high technology and e-commerce as a cover to deceive people. They also use the pretense of promoting industry development and enhancing personal economic ability, which makes their downline participants firmly believe in them and lose their judgment. On the other hand, traditional pyramid schemes mainly focus on developing downlines to purchase physical products, whereas online pyramid schemes mainly aim to recruit members to obtain membership fees, and even the payment methods are online, making it completely 'e-commerce-based.'
In fact, the reason why online pyramid schemes have such a significant impact is because they are highly covert and cross-regional. The development of members in online pyramid schemes occurs on the internet; members must join through websites, and the usernames they use are either pseudonyms or codes, each with their own login passwords. Their communication with each other is mainly conducted via email or instant messaging tools. Additionally, the internet's ability to spread information across regions allows pyramid schemes to break through geographic and national boundaries, flourishing even within a single country. However, due to the limitations of local jurisdiction, local industry and commerce departments can only supervise pyramid scheme activities within their own regions and cannot cut off nationwide schemes at the source. Key personnel in pyramid schemes often operate on a 'move to a new place after each action' basis, roaming throughout the country, which greatly increases the difficulty for industry and commerce departments to investigate and gather evidence.
In conclusion, the general public must stay vigilant. Pyramid schemes not only harm others and oneself, but also have a huge impact on social stability. Once you deceive your friends or family, the entire household could be trapped in a quagmire, potentially losing not only property but, in severe cases, even life. Therefore, once such behavior is discovered, it is essential to report it to the police immediately and not remain indifferent.
