Press Briefing on Shandong Province’s Crack-down on Pyramid Selling

[9:30:11, 8 April, 2009] Kong Fanke: Good morning, ladies and gentlemen, dear media friends.

[9:32:03, 8 April, 2009] Today, we hold a provincial government press briefing on cracking down pyramid selling and have invited Mr Wang Tianren, deputy secretary of the Party Group, deputy director and spokesman of the Provincial Administration of Industry and Commerce, and Mr. Zhang Zhihua, member of the Party Committee and secretary of the Commission for Discipline Inspection of the Provincial Public Security Department, to give us a briefing on our province’s crack-down on pyramid selling, its current characteristics, warnings against it, and the ten typical cases of crack-down in our province.

[8 April, 2009 9:36:04] Wang Tianren: Good morning, ladies and gentlemen, dear media friends.

[9:36:38, 8 April, 2009] Wang Tianren: Now, I will give a briefing on the general situation of our province`s industrial and commercial administration system and public security system’s crack-down on pyramid selling and the current new characteristics of pyramid selling.

[9:37:17, 8 April, 2009] Wang Tianren: According to the statistics, in 2008, our province`s industrial and commercial administration system investigated and settled 30 cases of illegal pyramid selling, involving a total value of 16.97 million yuan, with more than 790 pyramid selling dens suppressed, and nearly 31,000 pyramid selling people cleaned up and dismissed. The public security organs across the province put on file and investigated 369 criminal cases of pyramid selling, of which 338 cases were solved, involving a total value of 952 million yuan, with 1038 suspects in criminal detention, 248 people transferred for prosecution, 693 people sentenced to re-education through labor, and 69 people sentenced to prison. That has effectively curbed the resurgence of pyramid selling. The main measures we took are as follows.

[9:38:02, 8 April, 2009] Wang Tianren: 1. Strengthening law enforcement and maintaining the high-pressure momentum of crack-down. 2. Strengthening popularizing-law education and striving to create a favorable public opinion environment.

[9:43:08, 8 April, 2009] Wang Tianren: Under the joint crack-down of the industrial and commercial administrations and public security organs at all levels, the open, large-scale and illegal activities of pyramid selling have been restrained to a certain degree in our province, and the number of cases of pyramid selling has quite declined However, pyramid selling still ranks foremost among all kinds of economic crimes, some pyramid selling organizations are still active in our province, and combating pyramid selling is still a very arduous task. Its main characteristics and new tendency are:

[9:43:25, 8 April, 2009] Wang Tianren: First, pyramid selling is more clandestine and diverse in form. Second, using the Internet for pyramid selling is becoming a more and more serious problem. Third, there is an increasing trend to lure students to participate pyramid selling. Fourth, cases of pyramid selling are increasingly becoming a pressing problem that affects social stability. Fifth, it deserves our attention that the means of pyramid selling tend to become complex.

[9:48:34,  8 April, 2009] Wang Tianren: Thank you!

[9:49:24, 8 April, 2009] Kong Fanke: Next, we have Mr. Zhang Zhihua, member of the Party Committee and secretary of the Commission for Discipline Inspection of the Provincial Public Security Department, announce warnings against the illegal activities of pyramid selling, and the typical cases of Shandong provincial industrial and commercial administration system and public security system’s crack-down on pyramid selling.

[9:49:32, 8 April, 2009] Zhang Zhihua: In order to protect the broad masses of people from being duped, to prevent job-hunting college graduates, laid-off workers and returned migrant workers from falling into the trap of pyramid selling, to ensure the safety of people`s property, and to   maintain social stability and harmony, the Provincial Public Security Department and the Provincial Administration of Industry and Commerce hereby announce the following warnings.

[9:51:35, 8 April, 2009] Zhang Zhihua: First, guard against pyramid selling organizations, which might lure you away from your school, home or hometown to another place to engage in illegal activities of pyramid selling, with high reward as the bait, in the name of business recruitment, job placement, and partnership, and through such social relations as relatives, friends, classmates, or comrades-in-arms.

[9:51:47, 8 April, 2009] Zhang Zhihua: Second, be alert to pyramid selling organizations and some so-called legitimate companies, which recruit new members and calculate their payments on the basis of their sales performances, under the pretext of direct sale, chain sale, franchise, chain partnership, in the name of commodity sale, and in the form of developing partners, agents, preferential customers and members.

[9:51:57, 8 April, 2009] Zhang Zhihua: Third, watch our for Internet pyramid selling, under the pretext of net gains, e-commerce, network marketing, and online fund investment.

[8 April, 2009 9:52:08] Zhang Zhihua: Fourth, when college students look for jobs and obtain employment, it is necessary for them to carefully screen, verify, and inquire about the employer’s requirements, the subject qualification, and information related to its production and management, in order to verify its legitimacy so as not to fall into the trap of pyramid selling.

[9:52:23, 8 April, 2009] Zhang Zhihua: Fifth, be on guard against pyramid selling organizations or pyramid selling key members that encourage participants to gather to cause riots, to appeal to higher authorities, to defy law with violence, and to endanger social stability, in order to evade responsibility and shake off their responsibility, when cases of pyramid selling are investigated or pyramid selling will collapse soon.

[9:53:41, 8 April, 2009] Zhang Zhihua: 1. The case of illegal management involving Liaocheng Lan upon China and the United States Environmental Protection Technology Co., Ltd. 2. The case of illegal management involving Chen and others in Liaocheng. 3. The case of illegal management involving Si Shuqiang in Zibo. 4. The case of illegal management involving Xu and others in Weihai. 5. The case of illegal management involving Lu Jiefeng and others in Taian. 6. The case involving Wang Yongfeng, who recommended and lured persons to participate in pyramid selling. 7. The case involving eleven persons including Luo Juan and Qiang Fan, who recommended and lured persons to participate in pyramid selling. 8. The case of illegal pyramid selling involving four persons including Gao Jushan and Wang Limei. 9. The case of Zhang Hongyuan’s pyramid selling of Lanwangde cosmetics made by Xintian, Wuhan. 10. The case involving Hanting District’s Film Distribution and Exhibition Company located in Weifang City, which provided a training place for pyramid selling .

[10:32:46, 8 April, 2009] Kong Fanke: Today`s press briefing is over. Thank you.