Recruiting Illegal Multi-Level Marketing Members Using Celebrities and Football Coaches... 13 People Criminally Charged

Seoul Civil Affairs Judicial Police Unit Recruits Over 15,000 Members Nationwide, Detects Unfair Profits Worth 7.2 Billion Won

The scene of the seizure at the headquarters of illegal multi-level marketing company K.

[Asia Economy Reporter Join Kyung] On the 27th, the Seoul Metropolitan Government's Civil Affairs Judicial Police Unit announced that it has criminally charged 13 individuals, including company representatives who recruited illegal multi-level marketing (MLM) members by using celebrities, soccer coaches, and restaurant business owners as figureheads. Among them, one main suspect was arrested.

The exposed company operated a shopping mall using an MLM method, paying commissions based on the recruitment performance of subordinate members, thereby conducting financial MLM fraud and illicitly gaining 7.2 billion KRW in membership fees. According to the "Act on Door-to-Door Sales, etc.," engaging in monetary transactions through MLM methods can result in imprisonment of up to 7 years or fines up to 200 million KRW.

To enhance the company's image, they promoted socially well-known figures such as honorary chairman Lee ○○, a restaurant business owner; honorary representative Park ○, a former voice actor; former National Assembly member Jung ○○; lawyer Kim ○○; professor Kang ○○, a standing advisor; and soccer coach Park ○○ as advisors and advisory committee members to recruit new members.

The recruited members totaled 14,951 nationwide, including 4,072 in the Seoul area. They held briefings targeting unspecified groups such as retirees, housewives, and the elderly for 10 months starting from November 2018, operating about 70 centers nationwide.

The suspects lured people by promising substantial earnings based on the recruitment performance of their subordinate members, confirmed to have conducted monetary transactions by paying commissions through a three-level or more pseudo-MLM organization.

When the investigation proceeded, the company representative arbitrarily shut down the marketing computer system, withholding 1.4 billion KRW in commissions owed to members. Additionally, many victims suffered losses due to the delisting of coins listed on cryptocurrency exchanges.

This investigation was initiated after crime suspicions were detected through a business briefing video reported by a citizen. Notably, the arrested company representative was found to have committed similar offenses again despite being on trial for the same crime.

The Seoul Metropolitan Government emphasized the need for citizens to exercise special caution against financial MLM fraud targeting ordinary investors who cannot find suitable investment opportunities due to the economic downturn caused by COVID-19 and low interest rates at commercial banks.

Park Jae-yong, head of the Seoul Civil Affairs Judicial Police Unit, stated, "If a company recruits shopping mall members by using celebrities, charges membership fees, pays commissions for introducing others, sells coins, and entices people by promising significant future value increases, it is highly likely to be financial MLM fraud. We urge people not to register as members and to report and notify authorities immediately."

This content was produced with the assistance of AI translation services.