South Korean CEO charged with fraud

South Korean authorities have arrested and charged the CEO of a tech company and his accomplice with fraud. The two men are suspected of orchestrating a cryptocurrency scheme worth more than 500 billion won that preyed on elderly people with false promises of huge profits. The scam is estimated to have more than 10,000 members and has affected hundreds of victims.

Cryptocurrency Ponzi scheme targets seniors

Last month, tech firm Wacon CEO Byun Young-oh and Vice President Yim Mo-Soo were… arrested for allegedly orchestrating a cryptocurrency scheme worth hundreds of billions of won. The suspects were detained on “suspicion of fraud and other charges” after a court granted the arrest warrants due to “concerns over the destruction of evidence.”

According to the locals informationThe company, which has offices across South Korea, is suspected of running a Ponzi scheme with approximately 12,000 members. Wacon apparently operated “cryptocurrency staking products,” including a purported wallet service called “MainEthernet,” without being registered with financial regulators.

Wacon used a multi-tiered method to attract investors, offering unlimited referral income to those who “introduced acquaintances” to the company’s services. The scam primarily targeted older people who were uninformed about cryptocurrencies and what Ponzi schemes are.

Investors were reportedly offered huge benefits, including a “100% interest” return and profit-making through a “casino AI platform and other services.” Wacon also claimed to pay “30% of 40% interest.”^He day and 7% over the 43^Third day”, but he did not return investments last year.

In June 2023, investors lost hundreds of billions of won after the company failed to pay interest and the original investment amount. As a result, South Korean authorities began investigating the company.

Wakon reportedly switched to a new platform several times, forcing investors to move their funds and recruit new subscribers during the police investigation.

CEO charged with $366 million fraud

Last week, the Fifth Criminal Division of the Seoul Central District Prosecutors’ Office, headed by Deputy Chief Prosecutor Kim Tae-heon, charged Byun and Yim with “fraud and fraudulent receipt of funds.”

The research alleges that the company defrauded about 500 investors of an estimated 54 billion won, worth $39 million, and was responsible for “fraudulent receipt of approximately 500 billion won,” worth about $365 million.

As the report explains, “Pseudo-receipt is a business that collects funds from an unspecified number of people with the promise of keeping the capital without a license, registration or notification under the law.” It also details that fraud Charges may apply if it is proven that the money was received without the possibility of being returned.

South Korean police are reportedly still searching for more victims and more accomplices. In addition, authorities are investigating Wacon’s parent company, SAK-3, for possible fraud. SAK-3 chairman Kim Dae-chun and six shareholders, including Byun, are suspected of orchestrating a scam similar to Wacon’s cryptocurrency Ponzi scheme.

According to the investigation, the company lured investors with promises of high returns but has not paid customers since February 2023. The damage from SAK-3 is estimated at 1 trillion won, which represents Wacon’s losses and money raised from other investors.

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