Prosecutors say family members committed fraud
Published: 14 Jan. 2010, 20:42
Prosecutors allege that 24 family members and their relatives have unfairly made 25 billion won ($22.3 million) in profits by manipulating stock prices of 23 listed companies for three years beginning in 2004.
Investigators detained three, including a suspect surnamed Jeong, 45, the youngest among four brothers, and either booked or summarily indicted 18 without detention, including Jeong’s wife, brother-in-law and cousin, the Seoul Central District Prosecutors’ Office said yesterday.
Prosecutors also obtained detention warrants for Jeong’s third eldest brother, who fled. The other arrest warrant is for Jeong’s oldest brother.
Law enforcement officials said that Jeong’s family and his relatives allegedly earned 3 billion won by boosting a chemistry firm’s stock prices up by 300 percent through stock manipulation between March and June 2007.
Overall, he allegedly manipulated the stock 10,788 times between June 2004 and November 2007.
After questioning Jeong, prosecutors allege he set up a network across the country by placing his family members, relatives and former company colleagues in different cities, including Seoul, Incheon, Daejeon and Jeonju, in order to avoid detection by the Financial Supervisory Institute.
Due to Jeong’s alleged plot, the institute only reported individual wrongdoings to the prosecutors every year since 2005.
The financial watchdog did not realize that a bigger scheme was allegedly involved.
In addition, Jeong allegedly recruited part-time workers and ordered them to engage in criminal misdeeds in order to conceal the actual wrongdoer’s identities, investigators said.
Jeong allegedly used only borrowed-name bank accounts and renewed account numbers every three months to avoid the FSS. Jeong also allegedly said he would distribute profits, but didn’t.
Prosecutors assume that hundreds of people could have been victimized.
Investigators said Jeong spent 25 billion won in establishing not only a private education institute but also 20 franchised coffee shops nationwide.
He also drove luxury imported cars and enjoyed playing golf, prosecutors said.
“It is not easy to discover exactly how and how much of money he spent since he allegedly concealed his property by taking advantage of other persons’ names. We will investigate to get to the bottom of the case and collect the whole amount,” said a prosecutor on condition of anonymity.
By Lee Min-yong, Lee Chul-jae [[email protected]]
Investigators detained three, including a suspect surnamed Jeong, 45, the youngest among four brothers, and either booked or summarily indicted 18 without detention, including Jeong’s wife, brother-in-law and cousin, the Seoul Central District Prosecutors’ Office said yesterday.
Prosecutors also obtained detention warrants for Jeong’s third eldest brother, who fled. The other arrest warrant is for Jeong’s oldest brother.
Law enforcement officials said that Jeong’s family and his relatives allegedly earned 3 billion won by boosting a chemistry firm’s stock prices up by 300 percent through stock manipulation between March and June 2007.
Overall, he allegedly manipulated the stock 10,788 times between June 2004 and November 2007.
After questioning Jeong, prosecutors allege he set up a network across the country by placing his family members, relatives and former company colleagues in different cities, including Seoul, Incheon, Daejeon and Jeonju, in order to avoid detection by the Financial Supervisory Institute.
Due to Jeong’s alleged plot, the institute only reported individual wrongdoings to the prosecutors every year since 2005.
The financial watchdog did not realize that a bigger scheme was allegedly involved.
In addition, Jeong allegedly recruited part-time workers and ordered them to engage in criminal misdeeds in order to conceal the actual wrongdoer’s identities, investigators said.
Jeong allegedly used only borrowed-name bank accounts and renewed account numbers every three months to avoid the FSS. Jeong also allegedly said he would distribute profits, but didn’t.
Prosecutors assume that hundreds of people could have been victimized.
Investigators said Jeong spent 25 billion won in establishing not only a private education institute but also 20 franchised coffee shops nationwide.
He also drove luxury imported cars and enjoyed playing golf, prosecutors said.
“It is not easy to discover exactly how and how much of money he spent since he allegedly concealed his property by taking advantage of other persons’ names. We will investigate to get to the bottom of the case and collect the whole amount,” said a prosecutor on condition of anonymity.
By Lee Min-yong, Lee Chul-jae [[email protected]]
with the Korea JoongAng Daily
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