CEO of Amusement Park Crypto Scam Sentenced
In a significant ruling, a branch of the South Korean High Court has sentenced the leader of a crypto fraud scheme themed around an amusement park to 12 years in prison. The decision, reported by News1, was made by the Suwon High Court Criminal Division on November 27. The court dismissed appeals from both the prosecution and the defendant’s legal team.
Details of the Case
The 63-year-old defendant, whose name has not been disclosed, served as the CEO of a company that misled investors. Earlier this year, a local District Court found him guilty of violating several crypto-related laws, as well as charges of embezzlement and fraud, leading to his 12-year prison sentence.
The fraudulent scheme centered around claims that the company was raising funds to develop a theme park in Cheorwon County, located in Gangwon Province. Overall, the scam collected approximately $27.3 million from roughly 8,000 victims, who believed they were purchasing cryptocurrencies linked to the theme park’s prospective value.
Additional Sentences and Reactions
The High Court’s ruling extended beyond the CEO, upholding the sentences of two former employees from the firm. One employee received a seven-year prison sentence for conspiring with the CEO in the fraud, while another was given a suspended sentence of 10 months for assisting the CEO in evading law enforcement.
The judges determined that “no new circumstances” had emerged since the trial in the District Court. Although prosecutors sought to extend the CEO’s prison term, the High Court maintained that the original sentence was fair and appropriate, stating that neither side’s arguments had merit.
Methods of Fraud
The court proceedings revealed that the fraudulent company employed multi-level marketing (MLM) strategies to lure investments from individuals across South Korea. At its height, the firm operated branches in major cities, including Seoul, Busan, Daegu, and Ulsan. Employees traveled nationwide to conduct briefing sessions aimed at recruiting new investors.
Victims were misled into believing that investments had been secured from stakeholders in over a dozen Southeast Asian countries, who allegedly pledged more than $21.5 billion towards the theme park project. The CEO claimed that the project would be located in a Civilian Control Zone, an area near the Demilitarized Zone (DMZ) between North and South Korea.
Security Concerns and Legal Implications
Access to Civilian Control Zones is tightly restricted due to security issues related to their vicinity to North Korea. Building projects in these areas requires military permission, which the CEO falsely assured investors had been obtained. This deceit contributed significantly to the scale and longevity of the fraud.
Moreover, the CEO was found to have embezzled over $1.1 million from the company’s investment funds, diverting the money into various personal ventures, including businesses run by acquaintances, such as a hand sanitizer company.