South Korean police said on Thursday they had busted a criminal gang which used elite North Korean computer hackers to break into online game sites and steal prize points worth millions of dollars.

The North has been accused of several cyber-attacks on the South in recent years, but this was the first reported case of hacking for profit. Police said some of the proceeds apparently went to the regime in Pyongyang. 

They said 17 South Koreans had stolen 6.4 billion won (6.02 million USD) since June 2009 through the scam after hiring 30 North Korean hackers based in northeast China. After a joint probe with intelligence authorities, police arrested five of the South Koreans on charges of creating and distributing illegal computer programmes to clients in China and South Korea.

The police International Crime Investigation Unit (ICIU) said it was investigating but not detaining another 10 members while two gang members were still at large. The North Korean hackers -- graduates of top universities in Pyongyang -- created "auto programes" that could breach Korean online game servers and collect points exchangable for cash rewards, it said.

They were paid more than three billion won along with accommodation and living costs by the South Koreans. "We have acquired testimony and evidence that some of the payments have been sent to North Korean authorities, including a state trading company," an ICIU investigator told AFP on condition of anonymity.

The company called "Rungrado" is known to have earned money for the communist regime, he said. "This case proves North Korean hackers have been involved in various online criminal activities," the investigator said, adding other North Korean groups are also believed to have been involved in the games market.

South Korea, the world's most wired nation with more than 90 percent of homes connected to the Internet, has previously expressed concern about cyber attacks by Chinese and North Korean hackers.