Vietnamese police have arrested seven members of a multi-level marketing company on suspicion of swindling 45,000 people out of VND1.9 trillion (US$85.2 million) since 2014.
The arrestees are Le Xuan Giang, chairman of Hanoi-based Lien Ket Viet JSC, deputy director Nguyen Thi Thuy and five of their employees. They are now facing fraud charges.
Police said since late last year, many people have reported that they paid deposits to join the company but never received any commission as promised.
Investigators found that the company was established in 2010 and obtained a multi-level marketing license from the Ministry of Industry and Trade in 2014. Since then, the company have sold supplements and healthcare devices under a pyramid scheme.
Giang instructed his employees to recruit sellers by promising lucrative bonuses. Each seller was asked to deposit at least VND8.6 million to join.
Investigators said the company managed to expand its network by using deposits from new sales agents to old ones and repeating that cycle. It also wrongfully claimed that it was owned by the Ministry of Defense.
Investigators found the company actually sold fake products and that it had forged documents.
Police also froze the company’s account worth VND45.5 billion for investigation.