"Multifamily Housing and Apartment Auction Investment"... 100 Billion Won-Scale Fraud Uncovered

Fraud Charges Under the Act on the Aggravated Punishment of Specific Economic Crimes
Number of Identified Victims Reaches 80 So Far

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] A group involved in a 100 billion KRW-scale investment fraud in Busan has been caught by the police.

On the 14th, according to a comprehensive report by Asia Economy, the Yeonje Police Station in Busan is investigating 10 company officials, including a man in his 60s identified as A, on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. From 2020 for two years, they established an investment company named 'OO Asset Management' in Busan and allegedly gathered investors by promising an 8% monthly dividend if they invested in a business buying and selling auctioned properties, then pocketed the investment funds.

Police investigations have so far confirmed about 80 victims, with the confirmed damage amount exceeding 100 billion KRW. It is estimated that there are many victims yet to be identified. Given that the confirmed damage amount reaches 100 billion KRW and the damage per person ranges from tens of millions to hundreds of millions of KRW, the number of victims is expected to increase rapidly. A police official stated, "The amount of damage and the number of victims are expected to increase further." The police have applied for an arrest warrant for the ringleader, A.

The asset management company reportedly had teams numbered from 1 to 10 and employed over 100 staff members. They explained to investors that remodeling and selling multi-family houses and apartments they owned would generate profits.

Victims filed complaints against two company representatives in September with the Busan Metropolitan Police Agency on charges of fraud and similar violations related to unauthorized fundraising. Subsequently, the Busan Metropolitan Police Agency transferred the case to the Yeonje Police Station, which has since begun the investigation. If the profit from fraud exceeds 500 million KRW, the offender is subject to aggravated punishment under the Specific Economic Crimes Act. If the profit is between 500 million KRW and less than 5 billion KRW, the sentence is imprisonment for three years or more; if it exceeds 5 billion KRW, the sentence is life imprisonment or imprisonment for five years or more.

Victims are reported to have invested from a minimum of 10 million KRW up to as much as 500 million KRW.

Victim B told Asia Economy in a phone interview, "After attending an investment briefing invited by an acquaintance, I invested 167 million KRW over four months," adding, "The only return I received was 40 million KRW as dividends." Some victims reportedly even borrowed money from capital companies to invest.

The police recommend that, regarding real estate investments, the first priority is to verify whether the listed properties are genuine or false. A police official said, "There have been cases where investors were deceived into believing they could make large profits by purchasing recently closed schools at auction and reselling them, thereby defrauding investment funds," adding, "Before investing in real estate, it is essential to clearly check whether the property actually exists and whether the investment structure is likely to generate profits." Another police official also stated, "It is necessary to confirm whether the person recommending the investment has the economic capacity to return the principal and dividends."

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