10.1 Billion Won Crypto and Stock Fraud Scheme Tied to Violent Organization

Major Cryptocurrency and Stock Investment Fraud Case Uncovered

A significant fraud case involving cryptocurrency and stock investments has been uncovered by law enforcement, with 140 individuals implicated. This group, which includes members of a violent organization, was arrested for orchestrating a large-scale financial scam. The Incheon Metropolitan Police Agency’s Anti-Corruption and Economic Crime Investigation Unit announced on the 10th that they had arrested 36 people, including Mr. A, a man in his 20s, and five members of a violent organization. Additionally, 104 individuals were referred for prosecution without detention.

The charges against the suspects include fraud under the Act on Aggravated Punishment of Specific Economic Crimes, as well as violations of the Special Act on the Prevention of Financial Telecommunications Fraud and the Refund of Damages. The police also applied additional charges of organizing a criminal group to 73 of the 140 suspects, citing their systematic and planned involvement in the crimes.

Operation of Call Centers and Deceptive Tactics

Mr. A and others allegedly operated seven call centers in Incheon’s Michuhol-gu, Gyeonggi’s Siheung-si, and Goyang-si from June 2023 to May of this year. These operations targeted victims through deceptive means, luring them with promises of fake cryptocurrency and stock investments. The scam resulted in 254 victims losing a total of 10.1 billion Korean won, with individual losses ranging from 300,000 Korean won to 645 million Korean won.

The suspects used illegally obtained personal information databases to cold-call victims, claiming, “We will refund your past losses from lottery sites in cryptocurrency.” They then induced victims to join fake cryptocurrency exchanges. After depositing small amounts of virtual currency into victims’ accounts, they demanded additional purchases by offering to buy back the coins at inflated prices or deceiving victims into transferring money to mule accounts with promises of purchasing unlisted stocks below public offering prices before disappearing.

Organized Structure and Evading Detection

The suspects, affiliated with 11 organizations, divided roles into representatives, team leaders, CS (computing system) managers, and team members. To evade detection, they periodically relocated call center offices and used burner phones for communication. This level of organization highlights the sophistication of the operation and the intent to remain undetected for as long as possible.

Seizure of Assets and Additional Charges

The police seized 180 million Korean won in cash from Mr. A’s residence and froze assets worth approximately 6.45 billion Korean won, including vehicles and real estate lease deposits, through pre-indictment recovery preservation measures. One suspect was additionally charged with violating the Narcotics Control Act for possessing and using drugs.

Red Notices have been requested through Interpol to track four organization members who fled abroad. This international cooperation underscores the seriousness of the crime and the need to bring all perpetrators to justice.

Ongoing Investigations and Victim Support

A police official stated, “We will continue investigating crimes such as illegal investment leading rooms and similar frauds. We will also spare no effort to recover criminal proceeds to help victims.” This commitment to ongoing investigations reflects the determination of law enforcement to combat financial crimes and support those affected by such schemes.

The case serves as a stark reminder of the dangers posed by fraudulent investment practices and the importance of vigilance when dealing with financial opportunities online. As the investigation continues, authorities are working diligently to ensure that those responsible face the full extent of the law.