'337% Profit Rate'... Group That Deceived Investors and Embezzled 8.9 Billion Won Faces Trial

Violation of Criminal Organization Act and Capital Markets Act

A group that deceived investors by making unlisted stocks appear as if they were about to be listed and embezzled billions of won has been brought to trial.

On the 1st, the Criminal Division 4 of the Seoul Western District Prosecutors' Office (Chief Prosecutor Yeo Kyung-jin) announced that it had arrested and indicted two individuals, A (44), the CEO of an unauthorized financial investment company, and B (30), the head of the headquarters, on charges including organizing a criminal group, joining a criminal group, and violating the Capital Markets Act. Additionally, 29 other members of the organization, including a director and sales team leaders, were indicted without detention.

They are accused of embezzling 8.9 billion won from 761 investors between May 2021 and May 2022.

According to the prosecution's investigation, they attracted investors by using photos of stock accounts manipulated to show a 337% return rate and reports from 18 unlisted companies falsely stating consulting returns ranging from 99% to 481%.

They then sold unlisted stocks, which had no plans for listing, at prices inflated 10 to 100 times higher than the previous purchase price, generating profits. Under A's overall command, the group systematically divided roles among the head of headquarters, director, and sales team leaders, operated illegal leading chat rooms, and distributed false promotional materials, according to the investigation.

Initially, the police estimated 145 victims and damages of 3.5 billion won and referred the case, but the prosecution conducted a full review from the 15th to the 31st of last month and uncovered additional damages involving 761 victims and 8.9 billion won in losses.

The prosecution stated, "We will do our utmost to maintain the prosecution so that the defendants receive sentences commensurate with their crimes," and added, "We will continue to strictly respond to crimes that infringe on the livelihood of the public, such as illegal leading chat room frauds that deceive ordinary citizens and cause harm."