The Dongjak Police Station in Seoul announced on the 9th that they are investigating officials from Company A on charges of fraud for recruiting investors by luring them with a daily dividend payment of 2.5%.
According to the police, from February to June, the suspects advertised a business that purchases returned items from online shopping malls and sells them overseas for high profits. They recruited about 35,000 investors and embezzled over 500 billion won, facing charges of fraud and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission.
These so-called "senior executives" enticed investors by promising a compound daily dividend of around 2.5% for investments exceeding 5 million won. Although they paid some dividends initially, they stopped payments in June, claiming that their computer system had been hacked.
Mr. Lee, the representative of Company A, was sent to the Seoul Central District Prosecutors' Office last month under custody on charges of fraud and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission for collecting investment funds from tens of thousands of investors without obtaining company authorization.
A police official stated, "The number of suspects and the amount of damages may change depending on the investigation results."
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