Nine Individuals Charged in Major Investment Fraud Scheme

Nine members of an investment fraud organization have been indicted for scamming 26.7 billion KRW (approximately $22 million) by falsely promoting a money-making game scheme. The Daegu District Prosecutors' Office announced on June 19 that two key figures, including the ringleader identified as A (39), have been arrested and charged with fraud, while seven others involved in recruiting investors and providing training have been charged without detention.

From May 2022 to August 2023, A and his associates targeted retirees in their 50s and 60s, claiming that investing in a Play-to-Earn (P2E) gaming business would yield significant profits. They organized nationwide recruitment efforts, presenting investment seminars where they promised returns through the purchase of game characters, asserting that as the user base grew, advertising revenue would follow. They guaranteed daily payouts and offered refunds on game characters, claiming that the initial investment was secure.

Additionally, they promised to develop more games funded by the sale of game characters and even hinted at creating their own cryptocurrency, citing ownership stakes in well-known gaming companies to bolster their credibility. However, these claims were entirely fabricated.

Initially, to attract investors, A and his group paid out some of the promised returns, but these payments were merely a way to recycle funds from new investors, creating an illusion of a functioning business. To evade law enforcement, they accepted investments in cryptocurrency, with game characters priced between $1,000 and $20,000 each.

As the scheme progressed and thousands of gaming accounts were created, A and his associates eventually disappeared after distributing the supposed investment returns. Investigations revealed that they spent the 26.7 billion KRW on luxury items, including high-end sports cars and designer watches, and squandered much of it on illegal gambling and entertainment.

A representative from the Daegu District Prosecutors' Office stated, "We will do our utmost to confiscate all criminal proceeds obtained by A and his associates and ensure they face appropriate penalties for their crimes."