Seoul Gangnam Police Station received a complaint on August 21 of last month against Lee, the 40s chairman of Company A, and domestic and international associates, and is investigating charges including multi-level marketing fraud. They are known to have established a Korean branch in September 2024 and attracted investors by claiming, “You can receive daily interest by investing in advanced semiconductor business.”
A significant number of investors attracted by Company A were reportedly in their 60s and 70s. The company targeted a generation that had saved substantial funds for retirement but was relatively unfamiliar with virtual assets or advanced technology. According to police and others, Company A initially promoted that purchasing a ‘coin mining computer’ worth 40 million Korean won could generate profits. However, after receiving the money, they did not provide the actual mining equipment and demanded additional investments. It was also reported that they utilized a multi-level marketing scheme where bringing in acquaintances as investors earned commissions.
What undermined the victims’ vigilance were various devices that made Company A appear as a ‘trustworthy company.’ The company held multiple events at large hotels. According to victims, Chairman Lee of Company A visited Pyeongsan Bookstore in Yangsan, Gyeongnam, and used a photo taken with former President Moon Jae-in in promotional materials, also emphasizing connections with influential figures such as former lawmakers. In May, they allegedly encouraged investments by claiming, “The company will soon go public.”
Min, 69 years old, who retired from an insurance company, also invested in Company A upon a acquaintance’s recommendation. Min said, “With photos taken with famous figures and frequent grand events at hotels, I thought it was a remarkable company,” adding, “I invested the money I had saved throughout my life while working in insurance sales, but suddenly lost contact and could not receive any interest.”
Experts point out that the 60s and 70s age group is becoming a target for new types of investment fraud as the pressure to manage lump sums after retirement intersects with a rapidly changing financial environment. Professor Lee Woong-hyeok from Konkuk University’s Police Science Department said, “As the financial environment changes rapidly, older adults often find it difficult to assess the risks of new investment methods,” adding, “Especially when combined with acquaintances’ recommendations, it can lead to large-scale investments.” Professor Jeong Soon-dul from Ewha Womans University’s Social Welfare Department stated, “Older adults often encounter unverified information during their free time,” emphasizing, “There is a need to strengthen education to prevent new financial fraud at community centers and similar institutions.”
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