I have a fresh install of Ubuntu 12.04 with pure-ftpd version 1.0.35-1. I don't use database for the only user I have (ftpuser1 - localuser), but I want to lock him into his home directory. /ftp/ftpuser1 is the home dir of ftpuser1. /etc/pure-ftpd/conf/ChrootEveryone has the yes string and in /etc/default/pure-ftpd-common VIRTUALCHROOT is set to false, but ftpuser1 can freely walk around. My startup line for pure-ftpd looks like this :
/usr/sbin/pure-ftpd -l pam -A -8 UTF-8 -O clf:/var/log/pure-ftpd/transfer.log -u 1000 -E -B
So there is the "-A" in it for the ChrootEveryone.