Seven in custody for alleged auto club Ponzi scheme
Seven people have been taken into custody for allegedly running a Ponzi scheme through an automobile club, Shanghai police said today.
The suspects, who ran a car dealership in Shanghai called “Yuelong,” began recruiting people into the scheme in January of 2019 by promising high returns for new members they recruited.
More than 3,700 people took part, collecting over 10 million yuan (US$1.5 million).
Police began their investigation last August.
Recruits paid 1,999, 20,000 or 100,000 yuan to become VIP members of the auto club, and then became recruiters themselves. For every new member who joined the club, the recruiter was paid up to 20,000 yuan.