"Principal Guaranteed · 20% Interest Paid"... Gang Behind Fake Site Embezzled Billions

Two Arrested Including CEO of Investment Fraud Company
40 People Including Director and Branch Manager Sent to Prosecution Without Detention

A group that created fake virtual asset deposit sites and induced investments to embezzle thousands of billions of won has been handed over to the prosecution.

On the 29th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced that it had arrested and sent two people, including the CEO A of the investment fraud company, on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes and the Act on the Regulation of Similar Receipt of Money, and sent 40 others, including directors, branch managers, and center executives, without detention.

They are accused of holding business briefings from January 15, 2022, to July 3 of last year, deceiving investors by saying, "We will guarantee the principal and pay 20% interest after 40 days from profits generated by investing in overseas casino businesses," and then inducing victims to deposit money into fake virtual asset deposit sites, embezzling a total of 50.62 billion won from 10,671 victims.

According to the police investigation, the deposit site, which was designed to appear as if the investment funds were safely deposited, was actually just displaying numbers entered by the IT staff, and all cash and virtual assets deposited by the victims were confirmed to have been transferred to A’s account. The allowances and referral fees that should have been paid to existing investors were covered by a so-called 'Ponzi scheme' using the investment funds of new investors. Although A invested part of the money earned in overseas casino businesses, he hardly engaged in any profit-generating activities, and a significant portion was spent on the suspects’ allowances, luxury goods consumption, yachts, and land purchases, according to the investigation.

Since March, the police merged 490 cases reported to police stations nationwide and launched an intensive investigation, continuing to investigate about 50 related persons, including 42 suspects, program developers, and employees. In addition, they conducted raids on the Seoul headquarters established and operated by A, branch offices nationwide, and the suspects’ residences, seizing luxury watches worth tens of millions of won, and preemptively confiscated and preserved criminal proceeds worth a total of 10.1 billion won identified additionally before prosecution.

A police official said, "Fraud crimes that gain victims’ trust through virtual asset deposit sites and then receive investment funds are increasing," and urged, "If there is a place recruiting investors boasting high returns and guaranteeing the principal, please approach it cautiously."