Prosecutors: "Ra Deok-yeon Gang, Nationwide Crime Organization"... Organizational Chart Revealed in Court

Second Trial of Ra Deok-yeon Group on the 13th
Prosecution: "Corporate-style Market Manipulation Organization"
Regional Groups in Daegu, Incheon, Ulsan, Gwangju, and Others

The prosecution named the group led by CEO Ra Deok-yeon Hoan (42, detained and indicted) as a "corporate-style market manipulation organization" during the second trial of the group. The prosecution stated in court that Ra Deok-yeon’s group operated stock trading teams not only in Seoul but also in Daegu, Ulsan, Incheon, Gwangju, and other regions, making it a nationwide criminal organization.

On the 13th, at the Seoul Southern District Court Criminal Division 11 (Presiding Judge Jeong Do-seong), the prosecution revealed the nationwide organizational chart of Ra and seven others, as well as detailed methods of their crimes such as multi-level investor recruitment and stock trading. Ra and others are charged with violations of the Capital Markets Act (market manipulation, unregistered investment discretionary business), violations of the Act on the Regulation of Concealment of Criminal Proceeds, and other charges. The case of Joo Mo (50), a rehabilitation medicine hospital director overseeing sales for a group of doctors, and Kim Mo (40), who served as sales director, both detained and indicted on the same charges on the 3rd, was consolidated into this trial.

Ra’s Group Forms Corporate-Style Market Manipulation Organization

[Image source=Yonhap News]

The prosecution defined Ra’s group as a "corporate-style market manipulation organization." On this day, the prosecution disclosed the organizational chart of Ra’s group, stating, "The organization operates nationwide with many detailed teams such as corporate management and trading teams," and added, "The number of members is about 70 to 80." They also explained that the organizational structure is comparable to a criminal organization.

According to the prosecution, the organization consisted of ▲a sales team responsible for recruiting investors ▲a customer management team handling investor complaints and inquiries ▲a settlement team managing profit settlements and sales expenses ▲a corporate management team handling corporate affairs ▲a strategic planning team managing investment profits ▲and stock trading teams. The stock trading teams were organized in Incheon Cheongna, Seoul Seongsu, Yeouido, Seolleung, Gongdeok, Nonhyeon, as well as Daegu, Ulsan, and Gwangju, each with a team leader overseeing operations in their respective regions.

The prosecution viewed that Ra’s group selected stocks with large major shareholder stakes and easy price manipulation for market manipulation. They stated, "They invested in stocks with low circulating shares and trading volume and with management succession issues." They added, "The unregistered investment discretionary business was conducted because large investment funds were needed for market manipulation," and "They continuously accumulated stocks over a long period, raising prices gradually to avoid financial authorities’ surveillance." They also explained that the prices of eight stock items rose slowly before sharply plummeting in a crash.

More Investor Recruitment Means More Rewards... Multi-Level Marketing Sales Method

[Image source=Yonhap News]

Ra’s group mainly used a multi-level marketing method to recruit investors. The more investors recruited, the higher the sales commission received. For example, if member A of Ra’s group recruited investor B, A would receive 3% of B’s profits; if B recruited investor C, A would receive 2% of C’s profits, and B would receive 3% of C’s profits. The profit-sharing rate increased by 1% for every 10 billion KRW increase in investment funds.

The investment funds attracted through this sales method were used as capital for market manipulation. Ra reportedly provided good treatment to salespeople, including salaries and vehicles. The prosecution said, "Salespeople boasted about belonging to Ra’s organization and earning huge profits while encouraging investments," and "If someone wanted to invest, they were referred to the customer management team to proceed with the investment."

Stock Trading Executed According to Ra Deok-yeon’s Instructions

Market manipulation was centered around Ra. The prosecution stated, "When Ra instructed the stock team to trade stocks, the stock team relayed Ra’s instructions to each trading team leader," and "The team leaders then passed the instructions to their team members, who executed stock trades as directed." The instructions were mechanical, such as "buy this many shares." After the trades were executed, reporting was done in a bottom-up manner, opposite to the top-down instruction flow. Ra received cumulative purchase status and other reports from trading team members and then planned the next steps.

[Image source=Yonhap News]

Trading team members carried investors’ mobile phones and placed orders by visiting their residences or workplaces to make it appear as if individual investors were trading stocks themselves. The prosecution judged that this method was used to avoid detection by financial authorities, who verify who directly conducted trades through IP addresses and other means when investigating suspicious transactions. The prosecution said, "They had no choice but to apply this method of trading by visiting investors nationwide, which is why a nationwide organization was necessary," and "Therefore, a large number of trading team members were required."

Communication methods were also controlled to avoid revealing signs of collusive trading. All communication was conducted via Telegram, and after contact, Telegram chat rooms were deleted or messages were set to auto-delete once delivered.

The prosecution plans to prove the entire structure of the crime by questioning internal organization employees as witnesses starting from the next trial scheduled for the 10th of next month.

Ra’s defense stated, "It is necessary to disclose which accounts were investigated and, if there were market manipulation transactions, the time units used for extraction," and added, "Statistical analysis of the total number of accounts, total purchase orders, and how many of those orders are suspected of market manipulation is needed to refute allegations of collusive trading."

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