A court in north China's Inner Mongolia on Wednesday sentenced two executives of a forestry company for defrauding investors of 1.28 billion yuan (US$160 million) through a type of pyramid scheme.

Chen Xianggui, 44, board chairman of Inner Mongolia Wanli Afforestation Co., Ltd., was sentenced to 11 years in prison and had to turn over 200 million yuan. Liu Yanying, 38, general manager of the company, was sentenced to nine years and had to give back 150 million yuan, according to the Intermediate People's Court in Baotou City.

The court said the scheme involved more than 30,000 people from 12 provinces and municipalities.

The company was involved in "illegal pyramid selling with false advertising" because it paid bonuses to members based how many investors they brought in.

Chen and Liu charged investors 1,660 yuan for each mu of land (0.066 hectare) and promised they would get 12 cubic meters of timber in eight years and 15 cubic meters in 10 years, the court said. Such a return would have represented a quadrupling of the original investments.

However, Inner Mongolia is harsh and dry, and its deserts generate sandstorms that drift as far as Beijing.

(Xinhua News Agency January 1, 2009)