REPORT: Pyramid Schemes Plaguing China; One Anti-Pyramid Activist Stabbed While Trying To Assist Victim, Another Bitten Repeatedly; Cult-Like Behavior In Spotlight

An anti-pyramid scheme activist in China was stabbed by both the perpetrator of the scheme and the victim, according to the state-run Xinhua News Agency. The wounds were not fatal, but demonstrate the dangers that confront citizens actively engaged in efforts to help an estimated 10 million Chinese caught up in schemes that use promises of riches and techniques described by independent media as brainwashing to maintain control over investors.

Separately, an activist with the same group has scars on his arm after being bitten by victims, the news agency reported.

Quoting government statistics, the news agency reported that the State Administration of Industry and Commerce broke up 10,980 pyramid schemes between 2006 and September 2009.

In early July, the government made 130 arrests and broke up 29 pyramid schemes in Guangxi Zhuang, an autonomous region that shares a border with Vietnam.  In the capital city of Nanning, 1,306 participants were found in the apartments of pyramid-scheme organizers, the news agency reported.

A private group known as the China Anti-pyramid Selling Association began its efforts to assist victims in 2006, according to the news agency. A cartoon that accompanies the agency’s story on China’s pyramid plague depicts a man tugging mightily on a rope to help victims scale a cliff to flee from a pyramid schemer holding up a box of worthless products in a valley of pending misery below. A woman is assisting the man, pulling with all her might to help a victim escape the huckster. One woman is clinging to a fellow victim’s shirt as she, too, seeks to flee.

The cartoon depicts the valley pitchman sanding in front of a blackboard. One man enthralled by the pitchman’s virtuoso performance is holding a wad of cash and reaching toward both the pitchman and the sky. Meanwhile, a woman who may be a doubter appears to be trying to keep her purse secure as she processes information and strains to get a closer look at details. In the deep background of the cartoon, one of the pitchfest attendees is shown with a dumbfounded look on his face — as though he is trying to process too much information from conflicting images in the incongruous scene.

Experts say pyramid schemes are all about incongruity. Prospects are separated from their money by practiced hucksters who employ razzle-dazzle, groupthink, mathematical sleight-of-hand, envy, jealousy, appeals to faith and greed — and anything that “works” to keep cash flowing to the schemes.

Also in the news agency’s story today is a photo of police breaking up a pyramid scheme in Anhui province last month.

Read today’s story by the Xinhua News Agency. (The powerful cartoon is on the third page of the story.)

Read a September 2009 story in USA Today about pyramid schemes in China. The newspaper reported that many of the schemes have morphed into “bizarre, cult-like underworlds” that have “bankrupted countless young Chinese of modest means.”

View an editorial and video package from CNN that shows police in China dealing with pyramid schemers by exposing them to public humiliation. The CNN package was produced in November 2009.