HANGZHOU, June 18 (Xinhua) -- Fifteen people allegedly involved in the nation's largest online pyramid scheme stood trial Tuesday in a court in east China's Zhejiang Province.
On June 11, police in Jinhua City cracked down on a website offering discounts on online purchases and arrested Ying Jiancheng and another 14 people allegedly involved in organizing the scam involving 24 billion yuan (3.9 billion U.S. dollars).
An investigation by prosecutors in Jinhua found that Zhejiang Yijia E-commerce Co., Ltd., which was founded by Ying and three others in May 2010, had been using an e-commerce website to run the pyramid scheme since July 2010.
The website, Wanjia Shopping, initially offered discounts to consumers on purchases made through the website. However, the website later asked consumers to buy products at a discount while promising refunds based on the full retail value of the products over time. With this gimmick, the company recruited more than 1.9 million members across China, leaving it unable honor its commitment to give members full refunds on their purchases.
Top executives of the company have raked in huge profits, with Ying accumulating 3.74 million yuan, according to prosecutors.
Outstanding debt for members of the Wanjia Shopping website stood at 773 million yuan as of June 11, the day the website was shut down by police, according to the investigation.
The court will announce its verdict at a future date.
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