'Refund Halt' MergePlus CEO Siblings Deny Charges Again in Second Trial

"Not a Regular Company but a Platform Company"... Maintaining the Same Position as in the First Trial
"Police Seized Audit Records Not Authorized by the Court During the Search"

Amid concerns over significant losses for many affiliated individual business owners, excluding large retail corporations prepared for compensation due to the large-scale 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 sibling representatives of Merge Plus, the operator of 'Merge Point' accused of causing a large-scale refund suspension incident, maintained their stance of completely denying the charges in the second trial. They particularly argued the illegality of the police search and seizure during the investigation process.

The Criminal Division 11 of the Seoul Southern District Court (Presiding Judge Seong Bo-gi) held a trial session at 11:10 a.m. on the 3rd regarding charges of fraud and violation of the Electronic Financial Transactions Act against Namhee Kwon (37), CEO of Merge Plus, her younger brother Bokun Kwon, Chief Strategy Officer (CSO, 34), and Mo Kwon, CEO of Merge Office (35).

At the trial, the defense lawyers for the Kwon siblings stated, "The prosecution still fails to distinguish between the concept of deficits in platform companies and general companies," adding, "Since the deficit was not due to Merge Plus's internal financial structural weakness, we cannot acknowledge the prosecution's allegations."

The siblings had denied the charges at the first trial on the 8th of last month, saying, "Although a 20% discount naturally causes a deficit, as the scale grows, the so-called 'lock-in effect' makes it difficult for sales outlets to operate outside our platform, so it was sufficiently manageable."

Regarding the breach of trust charges under the Act on the Aggravated Punishment of Specific Economic Crimes applied to CSO Kwon and Merge Office CEO Kwon, they also claimed, "There are many illegal aspects in the police search and seizure process."

The defense explained, "The police obtained a search warrant only for the violation of the Electronic Financial Transactions Act, but seized audit log review materials unrelated to this," adding, "We cannot accept charges based on these materials."

At the trial, the prosecution requested to summon a witness from the Financial Supervisory Service at the time to confirm whether Merge Plus corresponded to prepaid electronic payment means and electronic payment agency services, which the court accepted.

Meanwhile, they were prosecuted on charges of deceiving 560,000 victims by selling approximately 252.1 billion KRW worth of 'Merge Money' through a 'Ponzi scheme' business method from June 2018 to August last year.

They were also charged with operating an electronic payment agency business by recruiting members through a prepaid method without registering with the Financial Services Commission from January 2020 to August last year.

CSO Kwon and his sibling, Merge Office CEO Kwon, are also accused of embezzling about 6.6 billion KRW of Merge Office funds for credit card payments, stock trading funds, and personal church donations.

Their third trial session is scheduled to be held at 2 p.m. on the 29th.

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