NANCHANG - Police recently busted an online pyramid scheme in?East China's Jiangxi province, but concerns in rooting out such crimes remain as the Internet offers the opportunity for offenses to go unnoticed.

Jiangxi Provincial Intermediate People's Court on Aug 30 ruled that Tang Qingnan and five others were guilty of illegal fundraising, in which they raked in more than 3.8 billion yuan ($616 million).

Each received a prison term ranging from three to 10 years.

An investigation by prosecutors in Nanchang found that Jingcai Shenghuo E-commerce Co, Ltd., established by Tang Qingnan and his accomplices in July 2007, had been using an e-commerce website to run a pyramid scheme since 2008.

The company was involved in illegal fundraising through an e-commerce website TPY100.com. They asked people to pay 7,000 yuan to 70 million yuan to become members, promising them commission if they could coax others into the scheme.

The website initially offered discounts to members on purchases made through the website, and later asked them to buy products at a discounted price while promising refunds based on the full retail value of the products over time.

Meanwhile, those who paid 7,000 yuan earned first-level membership and gained 1,400 yuan commission for each newcomer, according to rules set up by the company.

The company set up a total of 16 membership levels and recruited more than 6.8 million members across China, leaving it unable to honor its commitment to give members full refunds on purchases.

Chen Gang, chief officer from Nanchang municipal public security bureau, said the company portrayed itself as an e-commerce business.

"The company was just transferring money from one member to a newcomer. The gap kept widening until the company's capital chain ruptured," said Chen.

The latest sentence shed a light on how Chinese swindlers turn online to cover their secret frauds in a cyber world with nearly 600 million Internet users.

Pyramid schemes have been banned in China since 1998 but remain rife in many less-developed regions. In recent years, the fraud has evolved from selling fake products to more sophisticated fundraising chicanery.

Li Xu, president of a civil organization, said online schemes are more deceptive, much disguised and hazardous compared with traditional forms.

As a result, the Ministry of Public Security began a joint crackdown with the State Administration for Industry and Commerce and 10 other government departments in June, arresting more than 560 people in 212 cases to date.

Even though 1,625 dens were destroyed in the crackdown, police are finding it difficult to detect crimes using the Internet.

"Using the Internet has exacerbated its danger as more people can easily fall victim, and it is a new trend," said Dong Fangxing, a deputy director from Jiangxi Provincial People's Procuratorate.

Dong has suggested legislation for lowering the legal threshold to prosecute pyramid scheme-related offences.

"The government should integrate departments as communication and financial branches to build information exchange systems to better control such crimes from the source," Dong added.

Yang Qian, deputy director of Direct Selling Industry Research Center at Peking University, called for a national policy on pyramid selling.

Investigations and research show a national policy is needed but will require time, Yang said.