Agency Deposit Embezzlement of Hundreds of Millions
"Multiple Victims, Large Amounts... No Remorse"
A group that deceived North Korean defectors and the elderly into engaging in unregistered multi-level marketing businesses were each sentenced to prison.
According to the legal community on the 1st, Judge Lee Yong-je of the Seoul Central District Court Criminal Division 13 recently sentenced Mr. A and his son Mr. B, who were charged with fraud and violations of the Act on Door-to-Door Sales, to six years and three years and six months in prison, respectively. Mr. A is the chairman of a company group that sells the so-called 'Jang Sechoekgi' (colon cleansing device).
Three related persons who worked at the multi-level marketing company with them were sentenced to prison terms ranging from two years and six months in actual imprisonment to one year and six months with a two-year probation, depending on their level of involvement. Those sentenced to actual imprisonment were taken into custody in court.
Mr. A registered a patent for the so-called 'Jang Sechoekgi,' a colon cleansing instrument, in 2008 and established a company to promote and sell this product. Subsequently, from 2017 to 2019, Mr. A and his group recruited multi-level marketing salespeople to sell this product and were investigated for embezzling over 1.7 billion won from numerous victims under the pretext of agency contract fees.
They mainly gathered North Korean defectors and elderly people at places such as churches, made them stay together, and promoted the product as if it had a panacea effect. They deceived them into believing that by becoming salespeople, they could automatically earn high profits through commissions from the activities of subordinate salespeople.
They reportedly deceived group salespeople with lies such as "If there are more than 10,000 salespeople, existing members will receive 10 million won monthly as rank allowances." They are also charged with embezzling a total of 657 million won from 23 victims under the pretext of agency contract fees by promising agency qualifications.
The court pointed out, "The defendants used an unregistered multi-level marketing organization, mainly targeting the elderly and North Korean defectors, deceiving victims into believing that an unrealistic business that could not proceed normally was possible," and added, "The defendants have not been forgiven by the victims and have made no efforts to restore the damages."
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