"AI Will Tell You the Lotto 1st Prize" Scam... Damage Amount Reaches 1.1 Billion Won

Suspected of Defrauding Over 1.1 Billion Won from 200 People with Full Refund Promises if Not Selected Within Deadline

A gang that embezzled membership fees worth over 1 billion KRW by claiming to provide winning Lotto numbers using an artificial intelligence (AI)-based algorithm has been apprehended.

On the 18th, the Namdong Police Station in Incheon announced that they had arrested Mr. A, a man in his 30s who operated a Lotto number prediction website, on charges of fraud and organizing a criminal group, and had booked 35 employees without detention.

The police determined that Mr. A formed a team centered around a management team leader and telemarketer employees, dividing roles such as recruiting members and managing membership tiers, establishing a hierarchical structure and committing the crimes in an organized manner. Accordingly, charges of organizing a criminal group were applied.

The group operated the site from February 2021 until last May. They induced service use by telling members, "We will make winning the Lotto first prize a reality, not just a dream," collected membership fees, and promised refunds if members did not win within the specified period. They are suspected of pocketing over 1.1 billion KRW from about 200 members through this method.

They also promoted the use of an advanced analyzer by claiming to extract predicted numbers using an "AI-based algorithm" or "values derived from a carefully selected analysis system," but it was found that the device was not actually used.

The six-digit lottery numbers provided to members were generated using an internal program, which randomly created numbers without any scientific basis.

Furthermore, Mr. A and his employees created a tier system classified into 3 to 4 levels, enticing victims by claiming that raising their tier would increase their chances of winning, thereby extracting additional fees.

Victims reportedly paid from 77,000 KRW up to 12 million KRW to join the service, but not only did they fail to win high ranks, they also never received refunds of their membership fees. Previously, victims formed online group chats to discuss civil response measures or filed complaints with the police, engaging in collective action.

In May, the police conducted a search and seizure at Mr. A’s office in Incheon, securing PCs, documents, and other evidence, and launched a forced investigation. They also applied for pre-indictment seizure of criminal proceeds.

The police stated that reports of damage continue to be received and estimate that the number of suspects, victims, and the amount of damage are likely higher.

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