Illegal Multi-Level Marketing Gang Seizing 86 Billion Won Handed Over to Prosecutors

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[Asia Economy Reporter Kiho Sung] A group running an illegal multi-level marketing (MLM) scheme that collected 86 billion KRW from 260,000 investors by promising high returns has been handed over to the prosecution.

The Intelligent Crime Investigation Unit of the Gyeonggi Nambu Provincial Police Agency announced on the 6th that it arrested two individuals, including Mr. A, the unregistered MLM company representative, on charges of violating the Act on the Regulation of Conducting Fund-Raising Business Without Permission, the Act on Door-to-Door Sales, and fraud. Additionally, 110 related persons were booked without detention and sent to the prosecution with a recommendation for indictment.

They are accused of operating about 100 branches nationwide from 2018 until August this year and embezzling 86 billion KRW from 260,000 people under the pretext of investment funds.

Mr. A and others approached victims by deceiving them that if they paid a paid membership fee, they could receive advertising revenue coming from large corporations through an online platform they operated themselves.

However, the online platform they promoted was structured in a way that did not generate actual profits, and it was found that Mr. A and others used some of the members' investment funds to cover payouts to other members. Also, although the paid membership fee was supposed to be paid monthly, they misled members into believing it was a one-time fee.

The police reported that they recovered approximately 1.91 billion KRW of criminal proceeds through seizure and confiscation measures before indictment.

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