[Exclusive] From 'Excel Damage Proof' to Obstacles... Elderly People on the Brink [Coin Fraud Republic]

Special Report <Coin Fraud Republic - They Were Meticulous>

③-⑶ Financial Supervisory Service Virtual Asset Reporting Center, Increasing Elderly Victims
"Targeting the Elderly from the Start of the Crime"
Victim Group "Reporting to Police, Proving Damage with Excel Is Overwhelming"

"They say to organize the details in Excel to report the damage, but how can an elderly person do that?" (Official from the Korea Fraud Prevention National Association)

"The victim appeared at the video interrogation room, but communication was impossible due to old age and hearing problems." (Excerpt from Jeju District Court's acquittal ruling on coin fraud case)

Although 'virtual asset (coin)-related fraud' targeting the elderly's retirement and livelihood funds is increasing, the complex crime structure and lack of information, characteristics of virtual asset fraud, appear to be applied more harshly to elderly victims. Asia Economy conducted in-depth coverage over a month through ▲an independent survey ▲Financial Supervisory Service (FSS) report reception status ▲court rulings on coin fraud cases targeting the elderly ▲interviews with victims, revealing that elderly victims face severe hardships at every stage of criminal punishment and damage recovery.

According to data from the FSS 'Virtual Asset Unfair Trading and Investment Fraud Reporting Center' received by Asia Economy through Rep. Han Junho of the Democratic Party on the 17th, a total of 1,102 reports were filed from January to May this year, with 396 reports (35%) from those aged 50 and above. This is an increase in the proportion of elderly victims compared to 466 out of 1,504 (30%) from June to December last year.

The increase in reports from people in their 60s was particularly notable. While reports decreased in most age groups this year, those in their 60s recorded 119 reports from June to December last year and 139 from January to May this year. Even excluding incomplete data from last month, the number increased by 20, showing the only upward trend. The FSS stated, "Virtual asset-related investment fraud is rampant," and launched the 'Virtual Asset-Related Investment Fraud Reporting Center' in June last year, which was expanded and reorganized into the 'Virtual Asset Unfair Trading and Investment Fraud Reporting Center' from January this year.

Despite the increase in elderly victims, they face difficulties from the very stage of reporting to formal investigative agencies such as the police. This is because complicated procedures are required, including being asked to organize the damage details in the document program 'Excel.' An official from the Korea Fraud Prevention National Association said, "To file a report or complaint, you have to calculate and organize the deposit and withdrawal details of the exchange's electronic wallet address, transaction IDs, and amounts per transaction in Excel one by one," adding, "No lawyer or anyone else does this well, so how can an elderly person who doesn't know Excel do it?"

Even if a criminal trial is held after many difficulties, the characteristic of being an elderly victim can be a hindrance. In a case where defendant A was prosecuted for coin fraud amounting to 34 million KRW in Gangseo-gu, Seoul in 2019, the trial was held not in Seoul but in Jeju. The elderly victim repeatedly refused to appear for witness questioning at Jeju District Court. Eventually, the victim appeared at the video interrogation room installed at Seoul Southern District Court and was connected via video to the Jeju court for witness questioning. However, in May, defendant A was acquitted. The court stated, "Although the victim appeared at the video interrogation room, communication was impossible due to old age and hearing problems. Subsequently, the victim was not summoned for further witness questioning or did not continue to appear even if contacted," citing 'lack of evidence' as the reason.

Fraudsters' Target is the Elderly... Elderly's Coin Investment Funds are 'Retirement Funds'

Although digital accessibility is lower than other age groups, the elderly are constantly exposed to virtual asset investment solicitations. In May, Asia Economy conducted a survey on virtual asset investment fraud targeting 157 elderly residents (aged 50 and above) in the Seoul metropolitan area with the help of the Korea Senior Welfare Center Association. The appropriateness of the survey questions was advised by the public opinion research firm Realmeter. Although it was difficult to secure samples due to the elderly's tendency to avoid revealing personal fraud experiences, meaningful findings were observed, such as the fact that the elderly's investment funds come from retirement money and that they received investment solicitations despite having little understanding of virtual assets.

The survey results showed that the majority of respondents, 145 people, answered that they had 'no investment experience,' and among them, 24 (16.6%) said they had been solicited to invest in virtual assets. When asked why they did not invest, 73 (50.3%) said they 'did not know the concept or investment methods of virtual assets,' and 64 (44.1%) thought 'virtual asset investment was risky.' When asked about future investment intentions, 121 (83.4%) said 'no,' 5 (3.4%) said 'yes,' and 19 (13.1%) answered 'not sure.'

Among respondents with virtual asset investment experience, there were 12 people (17.6%). Of these, 7 (58.3%) cited 'recommendations from acquaintances other than their children' as the reason for investing. Regarding investment funds, 6 (50%) cited earned income and 3 (25%) cited pensions, indicating that 75% of respondents used 'retirement funds' for investment. The most common investment amount was 'between 1 million KRW and less than 5 million KRW,' with 5 people (41.7%).

Kim Ju-yeon, head of the Korea Fraud Prevention National Association, said, "Although Korea is an internet powerhouse, the sophistication of fraud methods based on this is another reality. Therefore, most fraudsters target the elderly," adding, "Most elderly people have lived devoted to their children, but with extended lifespans and insufficient welfare, they are unprepared for old age and often feel bewildered. Since it is difficult to ask their children for help, they are more likely to fall for fraudsters promising high returns."

"Money saved while working as a janitor, lost after borrowing against the house"… Serious Aftereffects of Crimes Targeting the Elderly

The vulnerability of the elderly to virtual asset fraud has also been confirmed in courts. Several cases targeted the elderly from the planning stage of the crime. Since elderly victims lose money that should be used for retirement funds, the aftereffects of the crimes are more severe than in other age groups.

Defendant B, who was sentenced to six months in prison with a one-year probation at Seoul Eastern District Court in March, was prosecuted for embezzling about 20 million KRW by holding a 'coin briefing session.' The prosecution stated, "The defendant and accomplices conspired to defraud investment funds by deceiving elderly people and housewives who did not know much about coins into believing that the price of a specific coin would rise sharply in a short period."

Defendant C, who was fined 5 million KRW in November last year, committed fraud against an elderly victim he cared for while working as a caregiver. He promised, "I will entrust stock investment through my husband who works at a securities company and pay monthly profits," but the 34 million KRW retirement funds entrusted by the victim were used for virtual asset investment. C's husband was actually an employee of a virtual asset investment company and received incentives from the company thanks to the victim's investment. The Gunsan branch of Jeonju District Court stated, "The victim was not informed that investing in volatile virtual assets instead of stocks carries a very high risk of principal loss, and the defendant had no intention or ability to pay monthly profits or return the principal normally," and fined him 5 million KRW.

In the case of defendant D, who was sentenced to 12 years in prison and fined 2.5 billion KRW in the first trial for virtual asset investment fraud amounting to about 38 billion KRW related to a theme park to be built in the civilian control zone of Cheorwon, Gangwon Province, most victims were elderly. The Seongnam branch of Suwon District Court, where he was prosecuted for embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, fraud, violation of the Door-to-Door Sales Act, and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, criticized him, saying, "A significant number of victims are elderly and have suffered great damage. However, he did not reach any settlement with the victims and took no measures to recover damages."

Defendant Jang Jin-yong (alias) was prosecuted for embezzling over 1 billion KRW from 11 victims, mostly elderly, including Kim Mi-ok (alias), between 2021 and 2022 by claiming, "To recover hundreds of billions of foreign currency deposited overseas, fees and other costs are needed." When Kim's side demanded the return of money, he extorted additional money by saying, "I invested in a coin company three years ago and received profits in coins, which I deposited. Please collect fees for cashing out."

In April, the first trial at Seoul Central District Court sentenced Jang Jin-yong to seven years in prison. The court stated, "Most victims of the crime were elderly or economically low-income individuals. They appear to be living in unimaginable economic and mental suffering," and described the victims' statements about the damage in the ruling as follows.

“Victim Jo Young-sik (alias), born in 1947 and elderly, borrowed money from a loan company using his house as collateral and used it on the defendant’s side. Due to this case, his family broke apart, he divorced his wife of 40 years, and lost all the marriage funds for his children. He testified that he caused much pain and damage to his family and wants to leave this world peacefully without regrets, leaving some inheritance to his children and wife. He also said he cannot even enter the house where he used to live due to the damage from the crime.”

“Victim Lee Tae-hee (alias) had money saved while working as a building janitor, which was embezzled by the defendant, and victim Park Ji-hyun (alias) is a person with a level 3 physical disability.”

“Victim Baek Yoo-young (alias), daughter of Kim, appears to have suffered greatly throughout her pregnancy and childbirth due to the defendant’s crime. Baek testified in court that she lost all her assets, equivalent to 10 years of work and loans.”

We plan to conduct in-depth investigative reporting on 'virtual asset investment fraud.' We will strive to establish comprehensive countermeasures to eradicate coin crimes. Please send tips to (lsa@asiae.co.kr). We will investigate and report thoroughly.

▲Team Leader Lee Seon-ae, Managing Editor △Reporters Kim Min-young, Cha Min-young, Kim Dae-hyun, Hwang Yoon-joo