Recruiting Investors Through False Advertising
Also Accused of Manipulating Cryptocurrency Prices
Song Seungheon, Eldest Grandson of Former Dongwon Construction Chairman
On the 21st, the executives of the 'PicaCoin' issuing company, accused of generating virtual assets (cryptocurrency) by promoting ownership of unsecured artworks as "joint ownership," gathering investors, and manipulating market prices, were arrested.
Among them was Song Jaho (23), who had dated Park Gyuri, a member of the girl group Kara. Park Gyuri had served as the curator and Chief Communications Officer (CCO) of the company.
On the 21st, Judge Yoo Hwan-woo, in charge of warrants at the Seoul Southern District Court, conducted a pre-arrest detention hearing for Song Jaho and Sung Hae-jung (44), co-representatives of the Pica Project, who are accused of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, violations of the Capital Markets Act, and obstruction of business. He issued the arrest warrants citing concerns over flight risk and evidence tampering.
Before the hearing, at around 1:53 PM, the suspects appeared at the courthouse but did not respond to reporters' questions such as "Do you admit the charges?", "Did you recruit investors through false advertising?", and "Do you have anything to say to the victims?" They entered the courtroom without any comment.
PicaCoin is a virtual currency promoted as allowing multiple people to jointly own a single artwork by dividing its ownership into shares through a "fractional investment" method. The suspects are accused of manipulating the market price to inflate the coin's value and embezzle profits.
Prosecutors believe that the suspects attracted investors through false advertising as if the business was successful, despite not securing the artworks for investment. They also applied charges for unfair profits gained through market manipulation and for obstructing normal trading operations on the coin exchange.
Representative Song is the eldest grandson of Song Seung-heon, former chairman of Dongwon Construction, and became publicly known in October 2019 as the boyfriend of Kara's Park Gyuri.
Song Mo and Sung Mo, representatives of Pica Project, the issuer of Pica Coin, who are suspected of recruiting investors by claiming joint ownership of high-priced artworks and manipulating market prices, are entering the Seoul Southern District Court on the 21st for a warrant hearing. [Photo by Yonhap News]
In July 2021, Song was caught driving under the influence, which also brought Park Gyuri into controversy, and the two eventually broke up. It was reported that after the accident, he drove in reverse, and the alcohol test at the time showed he was heavily intoxicated to the point of license cancellation. There were also allegations of confinement as a female passenger who was riding with him demanded to get off but was ignored.
Initially, Song introduced himself as born in 1995, but when he ran for the National Assembly by-election in Seocho-gu, Seoul last year, it was revealed that he was actually born in 2000, shocking the public.
During her relationship with Song, Park Gyuri served as curator and Chief Communications Officer (CCO) at the Pica Project. She was summoned for a reference investigation by prosecutors in February. At that time, through her agency, she stated, "I have clearly explained that I did not participate in any illegal activities related to the coin business and did not obtain any undue benefits," and added, "I have no involvement in the artwork coin business but will fully cooperate with the related investigation."
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