‘Refund Chaos’ MergePlus CEO Siblings… 4-Year and 8-Year Prison Sentences Confirmed

5.7 Million People Purchased 252 Billion Won Worth of 'Merge Money'
Court: "Revenue Model Structure Difficult to Realize"

The CEO siblings of Merge Plus, the operator of Merge Point that caused massive damage due to a refund suspension incident, have been sentenced to prison.

Kwon Nam-hee, CEO of Merge Plus, appeared at the National Assembly's Public Administration and Security Committee's audit of the Fair Trade Commission held in October 2021, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

The Supreme Court's First Division (Presiding Justice Kim Seon-su) on the 12th upheld the original sentences in the appeal trial for Nam-hee Kwon, CEO of Merge Plus, and Bo-gun Kwon, Chief Strategy Officer (CSO), who were indicted on charges including fraud, sentencing them to four years and eight years in prison respectively. The court also ordered the CSO to pay a fine of 5.3 billion KRW and imposed a 10 million KRW fine on the Merge Plus corporation.

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

Merge Plus promoted Merge Money as prepaid recharge credits that could be used like cash, offering a "20% discount," which gained popularity. However, as major franchise stores such as convenience stores and large supermarkets terminated their contracts, a large-scale refund crisis occurred. 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 partner companies at 25.3 billion KRW.

The first and second trials sentenced CEO Kwon and CSO Kwon to four and eight years in prison, respectively. Additionally, the CSO was ordered to pay 5.3 billion KRW in fines, and Merge Plus corporation was fined 10 million KRW. The court stated, "It appears that Merge Plus's business itself was based on a deficit structure," and judged that "the profit model anticipated by the defendants was unlikely to be realized."

The Supreme Court also agreed with the lower courts' judgments. It ruled, "There is no error in the lower court's judgment that violates the rules of logic and experience, exceeds the limits of free evaluation of evidence, or misinterprets the laws regarding prepaid electronic payment methods under the Electronic Financial Transactions Act, electronic payment agency, fraudulent acts in fraud charges, or the exclusionary rule for illegally obtained evidence."

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