- Associated Press - Friday, August 28, 2015

LOS ANGELES (AP) - Five people have been charged in Los Angeles with running an investment pyramid scheme that brought in tens of millions of dollars.

A federal grand jury indictment returned Thursday alleges that beginning in 2011, the five ran a series of Hong Kong-based companies that supposedly made money from selling online children’s education courses.

Prosecutors say in fact, the money came from investors, mainly Chinese-Americans in Los Angeles, San Francisco and New York.

Authorities say the scheme collected $30 million, with the scammers keeping $6.5 million and the rest going to others involved in the scheme.

The defendants are charged with conspiracy and wire fraud. Each fraud charge carries a potential 20-year sentence.

The five were arrested earlier this month. One remains in custody and four are free on bond.



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