The Identity of a Major Corporation's Staffing Agency? High-Profit 'Wage Claims' Issuance Ponzi Scheme New Fraud

Busanjin Police Station Investigates Fraud Complaint Cases Involving 12 Victims and Over 1.5 Billion KRW

A new type of fraud involving the issuance of wage claims under the pretext of employment at large corporations has been uncovered.
[Image source=D Industrial Comprehensive Development website]

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] A new type of fraud scheme has been uncovered in which job seekers were deceived into believing they were dealing with a company that dispatched personnel to large corporations, then issued high-interest "wage bonds" and disappeared after collecting tens of billions of won in just over a year.

The fraudster established a seemingly legitimate personnel dispatch company, issued bonds worth 50 million won per unit, and attracted investors who were also job seekers by offering a high interest rate of 3% per month and 36% annually. The perpetrator is currently missing.

The fraudster set up a respectable office in downtown Busan and claimed to hire people as regular employees dispatched to large corporations, charging between 50 million won and as much as 300 million won per person.

The job seekers who came were filled with hope, believing they had secured an opportunity to work at a large corporation, and were further enticed by the promise of high-yield "wage bonds" that would provide interest income until actual employment.

According to the Busanjin Police Station and victims on the 12th, a man named Kim (45) established a personnel dispatch company called D Industrial Comprehensive Development around September last year and raised funds by claiming to invest in manpower projects for first-tier large construction companies.

They posted advertisements for regular employee recruitment on job search websites and collected investment funds of over 50 million won per person by promising 3% monthly and 36% annual interest, then continued their fraudulent activities by covering interest payments through a Ponzi scheme.

A victim in his 50s, Mr. A, responded to a job advertisement in April and fell for their scheme, risking losing all 300 million won invested across six units.

Mr. A, who needed a job, was lured by promises of enrollment in the four major social insurances, a base salary of 2 million won, and high investment commissions, investing all his savings including severance pay from his previous job.

About two months later, at the end of June, Mr. A discovered that they were failing to pay even the promised interest.

When the company representative Kim found it difficult to continue the Ponzi scheme, between June and early July, he used so-called "media play" by introducing the company through two major national newspapers to reassure existing investors and attract new ones.

Kim gave interviews to two major national newspapers under the pretext of "advancing as a specialized company in professional construction personnel management and real estate development," clouding investors' judgment.

After victims filed complaints and police investigations began, articles posted on the online editions of one major national newspaper and one central economic newspaper were recently deleted.

About 12 investors who suffered damages in exchange for employee recruitment have been identified so far. The confirmed damage amount currently stands at 1.5 billion won but could balloon depending on the investigation results.

The police have partially confirmed the criminal acts of the company’s corporate representative Kim and are conducting investigations after obtaining account warrants from the court.

Currently, company representative Kim is out of contact, and other executives claim they are also victims.

One victim said, "I was unaware that the corporation was a shell company with no sales performance and was deceived by the promise of reemployment at the company, investing all my money and even borrowing money," adding, "As the number of victims increases, the amount identified by victims themselves exceeds 5 billion won," urging a swift investigation.

The police are investigating under Article 6 of the Act on the Regulation of Similar Receipt of Money (Prohibition of Similar Receipt Acts) and Article 347 of the Criminal Act (Fraud).

A Busanjin Police Station official said, "About 12 damage complaints have been received," and "Account warrants have been issued to financial institutions, so the amount of damage will be revealed soon."

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