Aide to notorious swindler is arrested in ChinaAuthorities on Saturday apprehended a key aide to one of the country’s most notorious pyramid scheme con artists, news that has the prosecution here considering expanding its investigation toward the political circle.
The suspect, Kang Tae-yong, was arrested by Chinese police on Saturday and is expected to be brought back to Korea some time this week.
He formerly served as the vice chairman of a company run by Cho Hee-pal, who ultimately scammed his investors out of a total 4 trillion won ($3.5 billion) in the largest pyramid marketing scheme in Korea to date, according to prosecutors.
Cho established the Big Mountain Company (BMC) - on paper, a medical equipment and supply business - in Daegu in 2004, and over four years opened more than 10 branches in other cities under different names. Until 2008, he lured some 50,000 investors with the promise of high returns on their capital.
Officials hope that as the man who previously handled Cho’s finances, Kang will be able to provide new details on the case.
So far, authorities have uncovered two bribery cases linked to the scheme involving the prosecution and the police.
Prosecutor Kim Gwang-jun originally headed the investigation in 2008 before it fizzled out. He was later found to have accepted 270 million won from Kang and sentenced to seven years in prison in 2013 on top of being handed a 386.7 million won fine.
A senior superintendent surnamed Kwon, who worked at the Daegu Police Precinct, was subsequently arrested last month over allegations that he received 900 million won from Cho in 2008.
But the victims of Cho’s pyramid scheme have insisted that the con man and his aides bribed those in the political circle as well.
“We will expand the investigation of briberies to the political circle if needed,” an official from the Daegu District Prosecutors’ Office said on the condition of anonymity.
In his scheme, Cho suggested that if an investor made an investment worth 4.4 million won, he would get back 5.81 million won over the next eight months. BMC’s reputation grew as Cho gradually gained his investors’ trust, paying them back on time plus dividends.
“I thought it was a very good company because they paid me on time every day,” said one of Cho’s victims, a woman in her 60s. “So many people borrowed money from their relatives or friends and even made them invest as well.”
But the scheme eventually faltered, and some investors filed complaints with the police. They could not pay in time, and some investors filed complaints to the police.
Cho stowed away to China in 2008, and more than three years later, police announced that the con man had died from a heart attack at a hotel in Qingdao, China.
However, the prosecution has not ruled out the possibility that he is still alive.
Investigators and the victims say Kang was a financial manager in the pyramid scheme from the beginning and gave Cho advice each time he decided to expand his business.
“He wore luxurious suits and drove an expensive car, so everyone believed he was the brains behind the company,” another victim said.
BY KIM YOUN-HO, KIM BONG-MOON [email@example.com]
More in Social Affairs
Covid cases continue to drop but public anxiety remains high
On Covid vaccines, many Koreans say, 'You first!'
People finally feel the clutter, vow to stop shopping
Supreme Court says ousted president was guilty
Virus fighters shift focus to mental health