A Jiangxi province tycoon who was dubbed the king of pyramid sales has been arrested by Yunnan police for fraud. Ouyang Xiaofang, who ran a group of companies under the name Jindekang in Ganzhou, Jiangxi, was accused of cheating more than 15,000 people in Yunnan through a pyramid sales scheme, Xinhua reported on its Web site yesterday. Ouyang was arrested on November 22 on a highway in Jiangxi when he was trying to flee with his mistress and 120,000 yuan (HK$112,800) in cash, Xinhua said. He is being held in Yunnan's Chuxiong Autonomous Prefecture. The arrest and alleged crimes of Ouyang highlighted how widespread pyramid sales have become in China and the difficulties police face in dealing with cross-province crimes. Xinhua stressed that although several business associates of Ouyang were arrested and sentenced a year ago, Yunnan police had been unable to capture the tycoon until last month. Ouyang was not only rich, he was also a vice-chairman of the Jiangxi People's Political Consultative Conference and a vice-chairman of the provincial chamber of commerce. Although these titles did not make him a government leader, he was highly influential and headed the province's biggest charity group. But Xinhua said what Ouyang did in Yunnan was a different story. From 1999, Ouyang and his associates ran a pyramid sales network in Yunnan through a company called Kangtai. The company recruited tens of thousands of sales agents to sell a wide range of products from health food to wine. To qualify, the agents had to pay the company for services such as training fees. Unlike legitimate marketing firms, Kangtai attracted sales agents by promising them high commissions when they ordered products. Within a few months more than 15,000 people in Yunnan had signed up to become Kangtai sales agents and more than 90 million yuan was paid to the company. Kangtai soon failed to pay the agents their commission and collapsed. Although Yunnan police investigated the company and arrested several of its managers, Ouyang fled and returned to Jiangxi province. Banned by the Government, pyramid schemes continue to draw hundreds of thousands of people across China. Such schemes operate by offering the sales agents lucrative commissions based on the number of agents they recruit or products they order rather than the volume of sales they generate. Many such schemes collapse when the bosses disappear with the money.