After serving ten years for leading the ‘Pacific Direct Purchase Network’ pyramid scheme, Tang Qinnan relaunched a similar operation in Shanghai, recruiting 320,000 members and amassing over 1 billion RMB. Forty suspects have been arrested.

Social Context

China’s Prohibition of Pyramid Selling Regulations (2005) and Criminal Law Article 224-1 criminalize multi-level marketing schemes lacking genuine product value. Recent crackdowns—coordinated by the State Administration for Market Regulation and Ministry of Public Security—target recidivists and cross-provincial digital recruitment networks.

Safety Tip

Verify business registration and product legitimacy via the National Enterprise Credit Information Publicity System before joining any income opportunity involving recruitment commissions.