3 People Including Corporate Chairman Detained, 19 Not Detained
Total of 2,209 Victims, Damage Amount 528.1 Billion KRW
A group that deceived investors by claiming, "If you invest in land compensation projects, we will pay 5-8% returns on the investment," and embezzled thousands of billions of won has been handed over to the prosecution.
On the 5th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced that it had arrested and sent to prosecution three people, including Chairman A of K Corporation, on charges of fraud and quasi-deceptive solicitation, and sent 19 key sales personnel such as branch managers, executive directors, and directors to prosecution without detention.
They are accused of deceiving investors from September 10, 2021, to April 12 of this year by claiming, "We are generating 80-250% returns through land compensation projects. If you invest, we guarantee the principal and pay 5-8% returns on the investment," and embezzling approximately KRW 528.1 billion from a total of 2,209 people. The maximum damage amount was KRW 8.3 billion, and eight people were confirmed to have suffered damages exceeding KRW 5 billion.
The police obtained intelligence related to the case in March and merged 147 cases reported to police stations nationwide to launch an intensive investigation. In this process, they conducted searches and seizures at 10 locations, including six branches operating nationwide and the residences of A and the representative of K Corporation.
According to the police investigation, they deceived investors by claiming that the project was underway on land where the compensation date and amount were not determined and even on land not included in the development project. It was also revealed that they used a typical "Ponzi scheme" method by paying most of the investment funds as principal and returns to existing investors and purchasing corporate vehicles.
In particular, A has a prior conviction and was sentenced to prison in 2007 for deceiving buyers by selling land that was difficult to develop or had no economic value as developable land, and it was investigated that he committed the crime using the same method as before. A promoted to investors that "I can deposit 150 billion won of my own assets into the company" and flaunted his wealth by driving luxury imported cars, raising investment funds worth approximately KRW 500 billion. The police confiscated and preserved approximately KRW 14.2 billion of criminal proceeds from the group before prosecution.
A police official said, "We will continue to respond strictly to financial crimes that infringe on the livelihood of ordinary people, such as quasi-deceptive solicitation and illegal multi-level marketing," and urged, "If you are solicited to invest with guarantees of principal and high returns, it is highly likely to be fraud, so please be especially cautious."
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