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Chinese police have arrested two suspected ring leaders in an elaborate pyramid scheme that took in 1.6 billion yuan (US$209 million) from about 20,000 people across the country, state media said Friday.

Seven suspects are believed to have set up the Beijing-based Yilin Wood Company in 2004. The company cheated investors out of money by promising them high returns on parcels of forest land, the official Xinhua News Agency reported, without giving specific details.

Pyramid schemes usually involve attracting money by promising high returns and using money from new investors to repay earlier participants.

Suspected ring leaders Liu Liping and Zhao Yuping, both women, surrendered to Beijing police on Tuesday and Wednesday, respectively, Xinhua said.

Police say the suspects fled when the business collapsed earlier this year. Five other suspects are still being sought, it said.

Fake investments and pyramid investment schemes have become common during China's transition from a planned economy to a free market. Chinese leaders have tried to eradicate the scams.