'Refund Chaos' MergePlus Siblings Sentenced to 8 and 4 Years in Second Trial

The sibling CEOs of Merge Plus, the operator of Merge Point that caused massive damage due to a refund suspension incident, were sentenced to prison again in the appellate trial.

Seoul High Court.

On the 14th, the Criminal Division 6-1 of the Seoul High Court (Presiding Judges Won Jong-chan, Park Won-cheol, Lee Ui-young) sentenced Nam-hee Kwon, CEO of Merge Plus, and Bo-gun Kwon, Chief Strategy Officer (CSO), who were indicted on charges including fraud, to four years and eight years in prison respectively, the same as the first trial. The court also ordered the confiscation of 5.3 billion KRW from CSO Kwon. The Merge Plus corporation was fined 10 million KRW.

The court stated, "The business of Merge Plus appears to be based on a deficit structure," and "It was judged that the profit model anticipated by the defendants was unlikely to be realized."

CSO Kwon was found guilty of indiscriminately using company funds for luxury car rentals, stock investments, and living expenses for family and acquaintances, as well as embezzling 2.9 billion KRW by inflating commission fees for selling Merge Money and paying them to subsidiaries.

He was also found guilty of violating the Electronic Financial Transactions Act by operating an electronic payment agency business without registering with the Financial Services Commission.

However, the court acquitted CEO Kwon of fraud charges before November 1, 2020, as in the first trial, reasoning that it was difficult to see that she exercised substantial influence over the company during that period.

Previously, the Kwon siblings were arrested and indicted on charges of selling 252.1 billion KRW worth of Merge Money, a prepaid recharge fund, to 570,000 consumers from May 2020 to August 2021, despite accumulating deficits and facing a business suspension crisis.

Merge Plus gained popularity by promoting Merge Money as a prepaid recharge fund usable like cash, offering a "20% discount."

However, a large-scale refund crisis occurred as major franchise stores such as convenience stores and large supermarkets terminated their contracts. Hundreds of subscribers demanding refunds gathered at Merge Plus headquarters in Yeongdeungpo-gu, Seoul.

The prosecution estimated the actual damage to Merge Money purchasers at 75.1 billion KRW and the damage to Merge Point affiliates at 25.3 billion KRW, respectively.

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