Gang Arrested for Embezzling Over 3.5 Billion Won Using Fake Stock Investment App (HTS)

Beware of Leverage Stock Investment Scams

[Asia Economy Honam Reporting Headquarters, Reporter Kim Chunsu] A group that deceived hundreds of people out of 3.5 billion KRW by promoting a fake online stock trading system, claiming that using their own stock trading system (HTS) allows loans of 10 times the investment amount at low interest rates for investment leading, and that losses can be reduced through loss cuts (stop-loss), has been arrested by the police.

The Cyber Crime Investigation Unit of the Jeonnam Provincial Police Agency announced on the 22nd that they have arrested three people, including program manager A (31), on charges of fraud and violation of the Capital Markets Act, and booked B (29) without detention.

They are accused of promoting through SNS and other channels from February to October under the name "Stak" as "leverage investment that can generate large profits even with a small investment," and defrauding about 400 investors of approximately 3.5 billion KRW by gaining their trust.

Police investigations revealed that the site they operated was a fake program where no actual stock trading took place, and that the investment funds deposited by victims were immediately transferred to dummy accounts and withdrawn, thereby embezzling the investment money.

They executed loss cuts (stop-loss) under the pretext of reducing losses for victims who suffered losses from fake trades, making the victims believe that all their investment funds were lost, thus preventing them from realizing they had been scammed.

Additionally, for victims who made profits, they returned the principal and then cut off contact to prevent reports, continuing their crimes in this manner.

The police seized 250 million KRW in criminal proceeds that were kept in cash.

The Jeonnam police stated, "Fraud schemes targeting small investors by promising high returns through leverage investment scams using fake HTS are rampant, especially preying on economically vulnerable people due to COVID-19, so we urge special caution."

They added, "We will expand investigations to include the development team, sales promotion team involved in operating the fake HTS program, and suppliers of dummy corporate accounts, and strengthen crackdowns on stock investment scam sites that are thriving amid the economic downturn caused by COVID-19."