"Guaranteed High Returns on Overseas Real Estate Investment"... Gang Embezzling 92.3 Billion Won Arrested

A group that promised high returns by investing in overseas real estate and swindled 92.3 billion KRW from 1,230 people has been arrested by the police.

A pamphlet used by a group that defrauded 92.3 billion KRW by promising to guarantee principal and profits when investing in overseas real estate. [Image source=Seoul Metropolitan Police Agency]

The Seoul Metropolitan Police Agency's Narcotics Crime Investigation Unit announced on the 28th that they had arrested 30 suspects on charges of violating the Act on the Regulation of Conducting Fund-Raising Business without Permission and the Door-to-Door Sales Act, as well as fraud. Among them, two people including the ringleader Mr. A (53) were detained, while Mr. B (48), the overseas real estate development corporation representative and younger brother of Mr. A, is currently staying abroad and an Interpol red notice has been requested.

They are accused of holding business briefings in Seoul, Incheon, Busan, and other locations from April 2019 to March last year, deceiving 1,230 people into investing 92.3 billion KRW by claiming that investing in gift certificates and Cambodian real estate development projects would yield high profits. They pretended to directly issue and manage the gift certificates themselves and recruited investors by guaranteeing a 5% return on investment in the gift certificate business despite having no business profits.

The group, which was running a pyramid scheme to circulate investment funds, ran out of funds and from January 2020 began advertising the sale of 2,700 housing units in Phnom Penh, Cambodia. They promised more than 50% returns on investment, but there were no business profits, and they continued the scheme by using subordinate investors’ funds to repay principal and dividends to senior investors.

Mr. A, the ringleader who had experience in multi-level door-to-door sales, also used his previous sales network to recruit investors. Most salespeople, composed mainly of women in their 60s, approached customers in places frequented by elderly women such as local beauty salons, then induced them to visit the investment office by telling them they could receive a salary just by showing up at the office.

The police received intelligence in March last year and launched an investigation. Through raids, they secured accounting books, investor recruitment training materials, and suspects’ bank transaction records to verify investment deposits and usage, and sequentially arrested 30 suspects. Of the 4.3 billion KRW reported in damages, 2.18 billion KRW was seized and preserved before prosecution.

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