Police uncover China's largest online pyramid scam

BEIJING, Aug 31 (Reuters) Chinese police have uncovered the country's largest alleged on-line pyramid selling scheme, involving 170,000 people and 1.36 billion yuan (180 million dollar), state media said today.

Authorities in Tai'an city, in the eastern Shandong province, uncovered the scheme named ''Swiss Mutual Fund'' in May, which was found to be illegal after investigation, xinhua said.

''It required each investor to pay 8,000 yuan (1,052 dollar) and promised to pay back 400,000 yuan (52,000 dollar) in 30 months'', the report said.

Two men have been charged for the scheme.

The uncovered scheme in Tai'an is just part of China's campaign against pyramid selling from July 16 to Aug. 15 this year, xinhua said.

''The campaign identified 600 schemes involving 1.7 billion yuan (224 million dollar) nationwide, with more than 3,300 organisers and core members arrested in 14 provinces and cities,'' xinhua said.

Pyramid selling is illegal in China and was banned in China in 1998 after a series of scandals, including one in 1995 in which two women were executed for masterminding a scheme.

REUTERS KK PM1553