The gang was armed with heavy weapons and allegedly extorted 800 million yuan (US$104.9 million) - one of the biggest sums in the country's history of such cases, the report said.

The officer, who was a division head in Tangshan's public security bureau, offered alleged gang leader Yang Shukuan support as well as arms and ammunition in return for an undisclosed amount of money and an Audi A8, the newspaper said.

Yang was reportedly addicted to drugs and a known womanizer. He allegedly recruited about 40 roughnecks, mostly ex-convicts, and bribed officers to set up his gang.

Yang reportedly drove his armored vehicles around Tangshan as though he was on patrol. Once when he was stopped by two police officers, Yang and his thugs beat the officers. Both were in hospital for a month, the report said.

Yang and his goons also allegedly threatened mine owners with guns and other heavy weapons to occupy their mines and companies. One owner refused Yang's offer to buy his mine at a cut-price deal. In response, Yang and his henchmen rushed to the man's house and compelled him to sign the contract by shooting at the ceiling, according to the newspaper.

Yang also "borrowed" money from local companies but the deals were reached under intimidation, bringing him at least 500 million yuan, the paper said.

A subordinate's wife was forced to become Yang's mistress. He allegedly coerced the woman to take drugs with him and warned the subordinate against interfering.

A senior executive of a state-owned company in Tangshan was forced to invest 200 million yuan in Yang's company, according to the report.

Yang's mob is considered the country's biggest organized gang with large stashes of weapons and ammunition.

In a recent crackdown targeting illegal explosives, guns, ammo and knives, Tangshan police confiscated 38 guns and more than 10,000 bullets from the gang, which also had tear gas grenades and other tools.

Hebei's Public Security Department has sent a task force to Tangshan for further probe.