South Korean law enforcement authorities have apprehended a man in his 60s, known as Mr. A, for masterminding a $60 million Ponzi scam amidst his probation period for a prior fraud conviction. The Yonhap News Agency reported these details on Friday.
Mr. A, along with six other conspirators, allegedly swindled investors from October 2020 through January 2022. They held promotional gatherings in Gangnam, Seoul, purporting to operate businesses involved in artificial intelligence (AI) and cryptocurrency.
By promising an exorbitant 300% return on investments, the group successfully lured over 2,200 investors. The investment amounts ranged from around $770 up to $770,000. The plot followed the traditional Ponzi scheme pattern, using the capital from new investors to pay off the initial participants until it ultimately fell apart.
Mr. A employed family members and acquaintances to manage diverse aspects of the operation, including finance, IT, marketing, and investor recruitment. The police initiated an investigation in September 2022 after receiving complaints, which led to a two-month-long manhunt when Mr. A vanished before his pretrial hearing.
The arrest unveiled that Mr. A was on a two-year suspended sentence from July 2021 for a similar fraud plot when he started this new operation. A police spokesperson remarked, “Ponzi schemes are heinous crimes that warrant severe penalties, as they lead to numerous victims and make it impossible to recuperate losses.” The spokesperson also noted that many victims were aged between 50 and 70 and were not familiar with AI or crypto technologies.
