In a pyramid scheme in Xinxiang, Henan Province, organizers make extravagant promises to potential victims. Photo: CFP

 
A mother in Sichuan Province went undercover last month in a pyramid scheme organization to rescue her two daughters, who had been taken in by promises of easy money. Even though pyramid schemes are an old issue, they constantly come up with new tricks to lure people in, making it tough for police crackdowns to succeed entirely.

When Ren Youmei decided to go undercover in a pyramid scheme group, she brought a bottle of pesticide with her, which she planned to drink in case she was found out.

Her two daughters had been tricked into joining the organization, thinking it was a way to get rich quick, according to the West China Metropolis Daily. Ren went in the group to try to bring them back around.

She came close to using the pesticide. Once, while secretly recording information about the group on a piece of paper, she ran into someone assigned by group leaders to watch her.

Ren threw the paper into the trash can. But the watcher blocked her way. They stood there, tense, for what felt like an hour. Ren then talked that person into leaving, found her paper and threw it in the sewer.

Within the space of a week she had recorded vital information about the group and sent hundreds of text messages describing the organization's structure, where people met and how classes were taught to her sister Junxia. Ren Junxia then contacted the police, who moved on the organization.

According to Yu Fachang, a spokesman of State Administration for Industry and Commerce at a conference in January, the administration investigated and prosecuted a total of 28,000 cases in 2014, a 67 percent increase over 2013.

Although pyramid schemes have long been a target of law enforcement in China, their existence persists. They continue to draw new victims with new promises of quick riches.

Going undercover

Last year, Ren's eldest daughter, Wei Yu, was contacted by a friend, who told a story about how she might get rich fast. If Wei Yu invested 69,800 yuan ($11,272), she could make more than 10 million yuan in return, the friend told Wei.

Wei Yu went with her friend to Pixian, Sichuan Province. A high-ranking "official" from the group came to talk to her, and showed her his car and house.

Wei bought into the lie, seeing a good opportunity to make money. She borrowed money from friends and even took some from her family. After a few months, Wei Yu even convinced her younger sister Wei Xue to join the organization with her.

Ren was shocked to hear this. Wei Yu graduated from university with a degree in design and had a job in Wuhan, Hubei Province. But she became so obsessed with the new "job" that she didn't even come home for Spring Festival, Ren told the South China Metropolis Daily.

Even though Ren tried to persuade her daughter to come home repeatedly, her daughter only said to her, "This is a good opportunity to change our family's life, you just don't understand."

Ren began suspecting that her two daughters were trapped in a pyramid scheme. There's no job that can guarantee that much return, she thought. The "job" also sounds like some of the fraudulent organizations she read about in her local newspapers.

Ren talked with her sister and made the decision to go undercover, and feed information to Ren Junxia secretly by text message.

"If I didn't go, my daughters would be ruined," Ren told the West China Metropolis Daily.

Battle of wits

After Ren went inside the organization, she lived with her daughter Wei Yu.

At first, the organizers were suspicious of Ren.

"They asked me if I watch television or read the news," Ren told the South China Metropolis Daily. "I lied to them and said I never watch the news."

She then said she only came to make sure her daughters are fine; if they are fine then she'll allow them to keep going with this "job." Hearing this, the organizers decided to let her stay.

But Ren remained under heavy surveillance, she told the South China Metropolis Daily. It was difficult for her to go outside or meet anyone. She and her daughters had to take "lessons" from a 40-year-old leader, who bragged about the program, but saying said it's a secret and shouldn't be broadcasted to anyone outside the group.

She wrote down all the places where lessons were held, as well as the names of people in the organization.

In order to send out information, she waited until her daughter was asleep and secretly sent text messages to Ren Junxia while hiding in her blanket under the cover of darkness.

After a week, Ren's sister took the evidence to the Pixian police station, asking the officers to help rescue her nieces.

The State Administration for Industry and Commerce and the Ministry of Public Security have worked with each other as well as local bureaus to combat such schemes in cities across China.

But even under such pressure, the fraudulent groups remain active. One reason is the victims are frequently introduced to the organizations by friends or relatives. The misuse of social trust is difficult to fight.

Wang Jun, a man from Shandong Province, was also recently rescued from a pyramid scheme organization. He didn't have a mother who went undercover, but his family was also the first to notice that something was wrong.

During a trip to Mianyang, Sichuan Province last year, Wang Jun's friend said he wanted to show Wang a good place.

The friend took Wang to a residential compound, where a team approached him and started to talk about their lucrative "business."

At first, Wang was suspicious. But the "business" was registered under a legitimate company in Beijing. Wang even looked it up online, and couldn't find anything amiss. Besides, it was Wang's friend who had introduced the business, so he didn't suspect much.

What was supposed to be a two-day trip turned into a week. Wang made a brief trip home to Shandong for a few days, telling his parents he got a job in Sichuan. Naturally, his family became suspicious because his previous job was in Beijing.

When Wang came home for Spring Festival this year, his family had arranged for him to meet someone unexpected: Li Xu.

Coming back from brainwashing

Li was the victim of pyramid scheme 10 years ago. But he's better known as the founder of the "Anti-Pyramid Scheme Website."

He cut ties with a pyramid scheme organization after he became a mid-level organizer and felt there was something fishy. He realized he was being cheated.

The website has volunteers from all around China. Many of them were former victims themselves, having gained insight into pyramid schemes from having held positions of authority within the organizations.

The volunteers work to persuade victims to quit, just like Ren. They also collect clues about new pyramid scheme groups and cooperate with police and lawyers on crackdowns.

But their work, like the work of government, can be hindered as well.

Over the years, Li has seen new types of fraud emerge, making pyramid schemes an old problem that constantly renews itself. Even though the media often runs reports on them, and police are constantly in pursuit, it's difficult to get rid of pyramid schemes completely.

"In the past, the groups try to get people onboard by telling them there's a product they can sell for a lot of money. Now though they are moving gradually towards concepts like the 'virtual economy,'" he said.

When police crack down on pyramid schemes, they usually only catch the leaders. The middle-tier "officials" sometimes escape to a new city and start again.

Last but not least, people are always blinded by the desire to make lots of money quickly. When Li and volunteers explain to them there's no money to be made, they usually come around.

Wang's family reached out to Li and invited him to Shandong over Spring Festival. That day, Li sat with Wang from 3 in the afternoon until 3 in the morning, explaining to Wang that he was trapped in a fraud, one which wouldn't make him any money.

Li explained the workings of these groups and showed Wang many videos of police crackdowns, saying he is trapped in the fraud that trapped so many others. Eventually Wang came to his senses and decided to cut ties with the group.

But others remain trapped for longer, because it's impossible to process the fact that they might have been so wrong.

At the day of the crackdown, the police found Ren, her daughters and a couple of the group's organizers in a three-bedroom apartment.

When the police asked Ren for information, Wei abruptly cut in, saying to her mother "You're new in the organization, you don't know anything."

Even days after the rescue, Wei Yu still believed that her mother ruined her chance to become rich. Ren told the South China Metropolis Daily that things are still difficult with both her daughters.

But she hopes they can come back around.

"I asked their father to take them to Guangdong Province and try finding them jobs," Ren told media. "There is no such thing as a free lunch; you need to earn your own money by hard work."
Newspaper headline: Edifice of lies