본문 바로 가기 주메뉴 바로가기

Protecting Freedom, Democracy, Law and Public Order

HOME > Prosecutors > Activities > News Brief

News Brief

News Brief Board .
Title Investigation Report on the JO Hee Pal Pyramid Fraud Case and Related Corruption Suspicions
Write date 2016. 7. 12. Click Count 724
Email spbin79@spo.go.kr
Content

□ Daegu District Prosecutors’ Office (headed by Chief Prosecutor Jeon, Hyeon Joon) had conducted investigation over JO, Hee Pal’s multiple financial pyramid schemes, the criminal proceeds and his protectors from August 2006 until after the principal offenders’ flight to overseas.

  ○ However, the efforts failed to identify even the scale of the criminal proceeds, raising doubts and leaving the impression that measures to compensate the damage to the victims were insufficient.

  ○ The Prosecution Service created an investigation team late July of 2014 to focus its capacity on investigating the pyramid scheme for about 23 months, thus, clearing all doubts and suspicions as well as compensating the victims for the damage.

□ The Prosecution Service examined all financial transactions of 25 entities involved in the financial pyramid scheme and approximately 17,000 bank accounts and traced assets from 25 million financial transactions. It also arrested Gang, Tae Yong, one of the key offenders that fled to China in seven years.

  ○ First, it inquired into the financial pyramid crime where Jo and his aides defrauded 70,000 people of more than five trillion won from June 2006 to October 2008 and successfully prosecuted four criminals including Gang, Tae Yong and Bae, Sang Hyeok for violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (fraud) and Act on the Regulation of Conducting Fund-raising Business without Permission.

  ○ Second, it found out that the actual criminal proceeds amounted to around 290 billion won that was not paid back to the victims.
    - It also identified that the employees of and those related with the financial pyramid company embezzled criminal proceeds of 86 billion won and laundered of 94.5 billion won in total and hid them.
    - It prosecuted 60 people including the computing manager of the financial company, scrap iron trader, representative of all creditors and Jo’s son for violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (embezzlement) and Act on the Regulation and Punishment of Concealment of Gains from Crimes.

  ○ Third, it came to know five government employees from the prosecution and police protected Jo and reduced or concealed the case. It arrested and prosecuted them for violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (bribe).
    - It prosecuted a violent gang member and sibling of a famous religious figure who swindled valuables on the pretext of lobbying to save Jo under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (fraud).

  ○ It prosecuted a total of 71 perpetrators including arrest and prosecution of 45 and suspended the charge on another five offenders that included Jang, wife of Gang.
※ Refer to Attachment 1 for the gist of prosecution and disposition against each of the accused.

□ The Daegu DPO made the offenders pay the victims 72 billion won after thorough tracing of criminal gains to compensate the damage inflicted to the victims. It also received the court order to preserve their property and bank accounts worth 23.2 billion won.

□ In the meantime, Jo was disposed to have ‘no authority to file prosecution’ as he was deemed to have died after the prosecution’s comprehensive investigations over lots of doubts.

□ Still making endeavors to arrest the wanted after the public announcement on the investigation result, the Daegu DPO will take stern actions against all crimes revealed. It will also do its utmost to collect and return the criminal gains to recover loss of the victims.

go to list