Pyramid scheme convicts launch appeal

  • [Tuesday] 22nd Apr,2014
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THE 11 people who were imprisoned and fined last year for their roles in the city’s biggest-ever pyramid scheme yesterday appealed their convictions at the Shanghai No. 2 Intermediate People’s Court.

They had all worked for Shanghai Jiadihao E-commerce Co, which acted as a front for a pyramid scheme that swindled almost 1.1 billion yuan (US$176.6 million) from 60,000 people across the country. The 11 were given prison sentences of 30 months to 13 years, and fined 10 million yuan.

Chief culprit Cao Jianhua, 64, who owned the company, argued yesterday that he ran a legitimate business and had been wrongly accused of operating a pyramid scheme, while former clerk Yang Wenbin claimed that the punishments handed down were too severe. Several other defendants said they had no knowledge of the pyramid scheme and had performed their duties honestly.

According to the court, Cao established Jiadihao in 2004 and three years later began recruiting agents to promote an e-commerce website known as

Through the site, Cao and his team swindled thousands of people by offering them the opportunity to become sales agents for the company after paying out either 5,000 yuan or 10,000 yuan for an initial product package.

At the first trial at the Huangpu District People’s Court 11 people were convicted for organizing and running pyramid sales activities. A further 68 agents were also given detentions or prison terms.