[More Cunning Gangs①] Gangs Transformed into 3rd Generation... The Reach Extends to ‘M&A and Stock Manipulation’

'Former Gang Boss Turned Entrepreneur'... Participates in Local Activities and Charity Events
"If You Touch Drugs, the Organization Collapses" Is an Old Saying... 'Will Do Anything for Money'

[Asia Economy Reporter Heo Kyung-jun] As organized crime groups (jopok) have entered businesses disguised as legitimate enterprises in response to changing times, crimes committed by jopok are becoming increasingly sophisticated and advanced. They are evolving from primitive forms of crime such as extortion and violence to corporate-style organizations, reducing the number of members and strengthening alliances with other groups.

As jopok diversify their survival strategies, cases of their integration into the institutional framework of society are gradually increasing. Nevertheless, unlike in the past, investigative agencies such as the prosecution and police have loosened their management of jopok, and they are unable to even grasp the current status of so-called "corporate-style jopok" violent organizations, suggesting that the evolution of jopok will intensify.

According to the Supreme Prosecutors' Office on the 20th, there are currently 236 factions and 3,745 members of jopok under general management by the prosecution. The number of those under special management reached 173 factions and 505 members as of last year. The number of jopok under special management by the prosecution has been steadily increasing: 157 factions and 453 members in 2017, 167 factions and 468 members in 2018, 169 factions and 465 members in 2019, and 163 factions and 594 members in 2020.

◆1st and 2nd Generation Jopok Operate Entertainment Establishments... Involved in Interests through Extortion and Violence

Jopok that appeared from the 1940s were linked to political forces and operated under the name of so-called "political thugs," but disappeared after the April 19 Revolution. Later, in the late 1960s, jopok who survived large-scale crackdowns extorted money under the pretext of protection fees from establishments in central areas such as Myeongdong, Chungmuro, and Euljiro, committing crimes such as assault, marking the birth of the 1st generation jopok.

In the 1970s and 1980s, jopok strengthened their power by building relationships with figures in politics and business circles, flourishing as emerging organizations such as Seobangpa, Yang-eunpa, and Obipa, with numerous groups appearing nationwide.

They mainly extorted money from small merchants and demonstrated their power to rival organizations by engaging in knife fights in the heart of the city. Additionally, large jopok groups like Beomseobangpa emerged through alliances between organizations, showing tendencies to develop into massive organizations similar to the Mafia, Yakuza, and Triads. The government declared a "War on Crime" in 1990, cracking down on jopok, resulting in the arrest of nationwide organization leaders and weakening their power.

After the War on Crime, jopok continued their existence by covertly involving themselves in various interests and disputes, carrying out contract violence, and directly operating loan sharking (private loans), prostitution establishments, entertainment bars, and gambling arcades to raise organizational funds. Even now, small-scale jopok based in local areas operate their organizations in this manner.

◆Birth of 3rd Generation Jopok... Involvement in Intelligent Crimes such as M&A and Stock Manipulation

So-called 3rd generation jopok have become increasingly intelligent and corporatized since 2010, engaging in activities such as mergers and acquisitions and stock price manipulation. Cases of jopok being booked for visible illegal acts like extortion or violence are continuously decreasing.

Recently, instead of increasing the number of members to show strength, they slim down their organizations, with the leaders transforming into businessmen or the organization itself disguising as a business entity, evolving into "corporate-style organizations." They also attend local activities regularly and donate to charitable organizations, outwardly presenting themselves as respectable businessmen.

A representative case is former Ssangbangwool chairman Kim Sung-tae, a jopok boss in Jeonju, Jeonbuk, who, during the 2010 acquisition of Ssangbangwool, conspired with Mr. A, who acquired shares from the second-largest shareholder of Ssangbangwool, to gain unfair profits of about 35 billion KRW through 80 nominee accounts involving collusive and fictitious trades, high-priced and volume-consuming purchases, and phantom purchase orders. Kim was sentenced to three years in prison with a five-year probation.

Jopok have also been involved in trade finance loan fraud amounting to about 23 billion KRW (Seobangpa, Suyuri faction, Incheon Bupyeong Sikgu faction, Gwangju Baegundong faction), opened illegal overseas internet futures sites generating about 190 billion KRW in sales, and expanded their activities to include illegal online gambling sites worth about 240 billion KRW, illegal sports Toto gambling sites worth 44 billion KRW, and even voice phishing crimes.

◆Emerging Jopok Involved in Drugs like Philopon... Yakuza Also Involved

1st and 2nd generation and early 3rd generation jopok avoided drugs, believing that "if they touch drugs, the organization will collapse." However, recently, jopok have changed their operational principles to "do whatever makes money," entering the drug market. Jopok who once forbade drugs to maintain their organizations now actively engage in drugs as a source of funding.

Investigative agencies report that recently, jopok have been involved in large-scale drug smuggling and distribution, protecting smugglers and distributors during the distribution process, and even directly selling drugs through social media platforms.

A representative case involves the leaders and members of the Hadanpa and Sasang Tonghappa factions based in Busan, who sold and used large quantities of philopon. There have been arrests of organizations distributing philopon via chat apps, and Japanese Yakuza and Taiwanese violent organizations were caught attempting to smuggle 8,649 grams of philopon.

A prosecution official stated, "In the 1960s, jopok did touch drugs, but after the government’s large-scale crackdown, they feared the organization might collapse and did not even touch them. Recently, the atmosphere seems to be changing. First, the threshold for drugs has lowered, and the supply has increased, so the culture of 'We are just thugs, we are different' is disappearing among jopok."

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