‘Stock Exchange and Investment Company Name Fraud’ 13.3 Billion Won Scam: 20s Sentenced to Prison

Third Stock Exchange 'KONEX' Impersonation... Fake Investment Site Established

Seoul Central District Court, Seocho-gu, Seoul.

[Asia Economy Reporter Kim Daehyun] In the first trial, men in their 20s who impersonated investment experts by using the names of domestic stock exchanges and well-known financial investment firms, deceived victims by promising to provide “stock leading information,” and embezzled investment funds amounting to about 13 billion KRW were sentenced to imprisonment.

According to the court on the 16th, the Criminal Division 24 of the Seoul Central District Court (Presiding Judge Jo Yongrae) recently sentenced Im (28, male), who was indicted on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud), to 4 years and 6 months in prison. Five others indicted together, including Yoo (24, male), were each sentenced to prison terms ranging from 1 year to 3 years and 6 months.

Previously, Im and others were brought to trial on charges of fraud by creating a fake investment site using the name “KONEX,” which refers to the third stock market following KOSPI and KOSDAQ, and deceiving victims into believing they were in partnership with famous financial investment firms.

They sent text messages to an unspecified number of people, claiming they would provide “stock leading information,” and when victims responded, they invited them to KakaoTalk open chat rooms. Afterwards, they induced victims to join the site by falsely claiming, “If you invest in Nasdaq derivatives and Bitcoin derivatives according to the leads, you will earn profits,” and lied, “If you place buy and sell orders according to the leads based on rises and falls, you will make profits. We only charge an 8% commission on the profits. Transfer the investment funds to the designated account.”

Victims received “fake investment results” through the sites they joined. In the open chat rooms, reviews such as “Started with 5 million KRW during the first entry and earned 2.3 million KRW in 10 minutes,” and “The rate of return was always high” were posted, but these were fabricated by Im and others who pretended to be ordinary investors and acted as promoters.

Although Im and others pretended to be investment experts, they actually had no knowledge of stocks or cryptocurrency derivatives. It was found that they never earned profits from investing in related products.

The prosecution judged that a total of 293 victims transferred approximately 13.335 billion KRW over about two months starting from June last year due to these crimes. The transferred money was withdrawn by other defendants and handed over to Im and others.

During the trial, Im and Yoo argued, “We only participated as cash collectors in the fraud and never purchased or installed computers or posted false messages as promoters,” and “We did not instruct other defendants to withdraw cash.” Three other defendants admitted to all charges.

The first trial court found most of their charges guilty. The court stated, “The defendants divided roles such as inducing investments and withdrawing cash, performing essential roles in each crime, and embezzled large sums from numerous victims. Such crimes adversely affect the sound financial order of our society and cause significant harm to society as a whole. A considerable number of victims have petitioned for severe punishment of the defendants.”

It further explained, “Considering that the defendants generally admitted to the crimes and appeared remorseful, that the victims seemed to have made excessive investment decisions driven by unrealistic greed for high returns in a short period, and that some victims reached settlements and expressed no desire for punishment, various sentencing factors were taken into account.”

Additionally, pursuant to Article 6 of the Act on the Forfeiture of Corrupt Property, the court confiscated 3,017 bills of 50,000 KRW and 102 bills of 10,000 KRW notes seized from Im and Yoo’s homes by the prosecution for the purpose of returning them to the victims. Im and others claimed that some of this money was earned by themselves, but this was not accepted.

Im and others appealed the first trial verdict.

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