NANNING - Police in a South China city announced on Tuesday that they have broken a sprawling pyramid scheme with the arrest of 173 people, including 19 ringleaders.

Police stormed a high-end restaurant in Beihai city in Guangxi Zhuang autonomous region on July 13, nabbing all the ring's 173 members, who were holding a grand banquet to honor two newly-promoted ringleaders.

Police said the ring was involved in illegal fund-raising, asking each new member to pay 69,800 yuan ($11,313) while promising them profits and promotions if they managed to coax others into the scheme.

Its members included retired officials, teachers and college graduates from across the country, and the scam has pooled more than 37 million yuan, according to police.

Pyramid selling has been banned in China since 1998 but has remained rife in many less-developed regions. In recent years, the fraud has evolved from touting fake products to more sophisticated fund-raising chicanery and extended its frontier on the Internet.

Recent reports have also noticed a rising proportion of college graduates falling victim to such scams, whose philosophy of "success through hard work" has a special appeal to those frustrated by tough competition in the job market.