A number of individuals who posed as employees of genuine investment and securities firms have been apprehended after committing an 11.1 billion Korean won investment scam, luring victims with the promise of “public offering shares windfall.”
The Cyber Crime Division of the Gyeonggi Bukbu Provincial Police Department stated on the 11th that they have arrested 73 individuals involved in a stock investment fraud scheme, including the main organizer A (in his 40s), facing allegations of forming a criminal organization, deception, and breaching the Capital Markets Act, with 22 of them being sent for legal proceedings.
A and others are accused of defrauding 315 individuals out of 11.1 billion South Korean won between May 2023 and March 2025 by posing as staff members of legitimate investment and securities firms, tricking them into thinking they would receive shares at discounted prices with confirmed public offering rates.
They are recognized for targeting victims with personally gathered data obtained illegally, and misleading them by asserting they could acquire “convertible bond (CB) volume” and “major shareholder volume” at reduced costs, terms not widely known to the general population.
Subsequently, they obtained funding from victims via fake accounts and provided them with counterfeit “margin commitment guarantee letters” designed to resemble official documents from investment firms to provide reassurance. In truth, they severed all communication and disappeared as the public offering listing date drew near.
Many of the victims were middle-aged individuals and older adults in their 40s, 50s, or beyond, with losses varying from several million won per person to as high as 1.7 billion won.
They functioned by splitting responsibilities into an “investment fraud group” that directly tricked investors and a “money laundering group” that concealed illegal funds.
Specifically, the investment fraud group consisted of several branches (sales teams) under the main organizer (headquarters) who managed the whole scheme, with the sales teams assigning roles based on titles like “representative,” “director,” and “manager.”
Some lower-level individuals were given a share of the stolen funds, with reports indicating that certain ones received as much as 600 million won. It was discovered that they utilized the illicit money to buy premium imported cars and luxury items, and some even used it to purchase and distribute drugs.
The police obtained the first key clue for the investigation in November of the previous year, combined around 300 comparable cases reported at police stations across the country, and by the end of last month, arrested 73 individuals involved in the organization, including the leader.
They seized cash valued at hundreds of millions of won through investigations and searches, and applied pre-indictment asset freezing measures on around 3 billion won in illicit funds.
A law enforcement representative said, “We are still examining further offenses and possible collaborators by analyzing the items that were taken,” and mentioned, “We will vigorously track down individuals from the organization who have gone overseas using actions like INTERPOL Red Notices.”
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