Recruiting Hundreds of Investors with 'High-Yield Investment Products' Bait... Gang Embezzled 2 Billion Won

7 years 8 months imprisonment... 1.6 billion won confiscation

A group that deceived hundreds of investors by promising high returns and extorted over 2 billion won was sentenced to heavy prison terms.

On the 14th, Judge Kim Bora of Criminal Division 13 at the Seoul Northern District Court announced that A (58), who was indicted on charges of fraud and violation of the Act on the Regulation of Similar Financial Transactions, was sentenced to 7 years and 8 months in prison and ordered to pay a fine of 1,633,960,000 won. B (53) and C (55), who were indicted on the same charges, were sentenced to 5 years and 2 years and 2 months in prison, respectively.

A was indicted on charges of establishing Corporation D in Namyangju, Gyeonggi Province, around November 2021 with B and C, and systematically and stepwise recruiting investors using a "high-yield investment product" as bait, embezzling investment funds totaling 1,633,940,000 won from 172 victims by August 2022.

It was confirmed that they falsely claimed through the shopping mall business and investment briefings promoted by Company D that "if you purchase E coin mining machines, D will operate them on consignment to increase profits and pay dividends." They also built trust with victims by using a Ponzi scheme method, paying returns and principal on earlier investments with funds from new investors.

Judge Kim stated, "Although it was not a stable business that could guarantee high returns, they created an appearance of success to deceive investors," and explained the sentencing by saying, "The defendants deceived an unspecified large number of victims over a considerable period by promising high returns on investments and embezzled a large sum of money, which is a serious offense."

He added, "While the victims also had a tendency to make excessive investments hoping for quick high returns, the defendants exploited the public’s expectations for high-yield investment products," and explained, "As a result, the victims suffered severe damage that has yet to be recovered, causing them extreme economic and psychological distress."