Beijing - The number of illegal fund-raising cases in China has been rising since 2008, with about 5,400 suspects arrested in 5,000 cases, a senior police officer warned on Tuesday.

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Liu Dong, deputy director of the economic crime investigation department under the Ministry of Public Security, said police across the country had recovered losses of more than 12 billion yuan ($1.8 billion) from these cases.

From 2005 to June 2010, police investigated 10,000 illegal fund-raising cases involving about 100 billion yuan, he said.

"Due to the current domestic and international economic environment, the number of cases is still increasing, with an annual rise of 2000 cases and 20 billion yuan of illegally raised funds," Liu told a press conference.

"We expect the growth rate of such illegal fund-raising cases and the risks caused by these crimes to remain high in the next few years."

To further curb illegal fund-raising and crack down on criminals, the Supreme People's Court and the China Banking Regulatory Commission implemented a new judicial interpretation for trials of such cases on Tuesday.

According to the top court, many major illegal fund-raising operations were carried out under the guise of legal companies and projects to entice people to invest.

"As the law was too general, it was difficult even for judges and police to decide whether some cases were legal lending or illegal fund-raising," said Pei Xianding, president of the No 2 Criminal Tribunal of the Supreme People's Court.

"This new interpretation makes the definition of illegal fund-raising clearer by adding stricter standards."

The standards will be considered in deciding punishments.

Officials also said fund-raising crimes usually involve many victims and tend to result in mass incidents and petitions by the victims.

"Some people who have their life savings swindled have even committed suicide," Pei said.

Liu Dong said the biggest illegal fund-raising case involved about 500,000 people in about 20 provinces and municipalities.

"Another reason for the frequency of such cases is that the public, especially senior urban residents and less-educated rural residents, have limited choices of investment," he said.

"They don't have much legal knowledge or risk awareness and can more easily be coaxed into donating their money."