'Mass Refund Suspension Crisis' MergePlus CEO Kwon Namhee and Sibling Arrested and Indicted

Prosecutors Estimate Total Damage at 100.4 Billion KRW
MergeOffice CEO Also Indicted Without Detention

Amid concerns over significant losses for many affiliated individual business owners, excluding large retail corporations prepared for compensation due to the massive refund crisis of the payment platform Merge Point, the headquarters of 'Merge Point' in Yeongdeungpo-gu, Seoul, on the 18th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yoo Byung-don] The brother and sister who are the representatives of Merge Plus, the operator of 'Merge Point,' accused of causing a large-scale refund suspension incident, have been indicted while in custody.

The Financial and Securities Crime Investigation Cooperation Team (Head Park Seong-hoon) of the Seoul Southern District Prosecutors' Office indicted Merge Plus majority shareholder and CEO Kwon Nam-hee (38) and his younger brother, Chief Strategy Officer (CSO) Kwon Bo-gun (35), on the 6th on charges of fraud and violation of the Electronic Financial Transactions Act.

The prosecution also indicted Kwon Mo (37), who is the sibling of the two and CEO of Merge Office, without detention on charges of embezzlement in violation of the Act on the Aggravated Punishment of Specific Economic Crimes.

According to the prosecution, from May 2020 to August last year, despite accumulating large deficits due to the 20% discount sale of Merge Money, which made normal business operations difficult, they are accused of selling 252.1 billion won worth of Merge Money to 570,000 victims without notifying them.

They are also charged with operating Merge Plus without registering as a prepaid electronic payment instrument issuer as stipulated in the Electronic Financial Transactions Act since around February 2018. They are further accused of recruiting some members through a prepayment method and conducting electronic payment agency business without registration with the authorities.

CEO Kwon is also accused of conspiring with Merge Office CEO Kwon to embezzle 6.7 billion won from Merge Office corporate funds between August 2019 and June last year, using it for credit card payments, family living expenses, stock investments, living expenses, church offerings, vehicle lease fees, and loans.

Additionally, between November and December 2020, they inflated the commission fees for selling Merge Money and overpaid another affiliated company, and treated loans to Merge Plus as losses, resulting in a breach of trust amounting to 2.9 billion won.

The prosecution indicted only the parts of the fraud charges against CEO Kwon and CSO Kwon that apply to 1 million Merge Point buyers. The prosecution estimates the total damage at 100.4 billion won, including 75.1 billion won from Merge Point buyers and 25.3 billion won from Merge Point affiliates.

Earlier, the police intensified the investigation by conducting raids on five locations including Merge Plus headquarters in August last year, imposing travel bans on CEO Kwon and two others, and applying for arrest warrants. The court also issued arrest warrants citing concerns over flight risk.

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