Chinese police have arrested 20,500 people involved in 2,848 cases of illegal pyramid selling from 2001 to 2005, the police authority said on Tuesday.

"After spreading nationwide, pyramid selling has developed into a serious crime," said Gao Feng, deputy director of the Bureau on Economic Crime under the Ministry of Public Security.

Gao told a press conference that more than 4.21 billion yuan (519.8 million U.S. dollars) was involved in the 2,848 cases.

"Illegal pyramid selling is a severe economic crime that poisons people's minds, damages the economy and threatens efforts to build a moderately prosperous society," Gao said.

Pyramid selling was introduced in China in the 1990s. Since then, some people have sold fake and inferior-quality goods through illegal pyramid selling means.

In 1998, the State Council issued a notice prohibiting all kinds of pyramid selling in China. But in recent years, pyramid selling has reappeared, prompting a crackdown by the Ministry of Public Security last year.

Since last May, Chinese police have uncovered 516 illegal pyramid selling cases and arrested 3,408 criminal suspects.

Gao said most people involved in pyramid selling are migrant workers, laid-off workers and other low-income citizens. Some government and Party officials and students also participated in the illegal activity. However most people involved could not earn money at all. Some even went bankrupt and became vagrants.

Source: Xinhua