Firm raided over shipwreck scamLaw enforcement authorities raided the offices of Shinil Group on Tuesday over an investment fraud scheme involving a Russian shipwreck rumored to contain treasure.
Investigators from the Seoul Metropolitan Police Agency searched the offices of Shinil Group in Yeouido and Gangseo District, western Seoul, and the homes of senior-level employees involved in the case. They collected computer files at the offices and said they intend to seize records of the employees’ banking accounts.
Authorities also requested Interpol place Yu Ji-beom, former head of a Shinil Group affiliate based in Singapore, on its wanted list. The police believe Yu spearheaded the investment scam from Vietnam.
According to authorities, Shinil Group pulled off a cryptocurrency racket by claiming on July 17 to have found the Russian cruiser Donskoi, which sank 113 years ago, in waters near Ulleung Island. The company encouraged investors to buy its cryptocurrency and promised to pay investors with sunken treasure, which the company claimed to have about 150 trillion won ($133.6 billion) worth of gold bars and other treasures on board. “We have confirmed that there is a thing that looks to be a treasure box, but we have not opened it yet,” the company’s public relations manager said at the time.
It was not the first time a Korean company claimed to have found the Donskoi. A company called Dojin Sireop attempted to lift the vessel in 1981, and Dong Ah Construction Industrial Company also failed to recover a ship they claimed to be the Donskoi in 1998.
Despite the lack of evidence and widespread doubts about Shinil’s claim, the group managed to attract tens of billions of won in investment by launching its own cryptocurrency called Shinil Gold Coin.
This prompted the Financial Supervisory Service to begin a probe into the company in late July. Police began investigating the case around the same time after a company that claimed to have found the Donskoi before Shinil reported the company for alleged investment fraud.
Police believe Yu is behind the scam. According to authorities, he spearheaded the establishment of a cryptocurrency exchange called Donskoi International Exchange and uploaded posts about the shipwreck on a blog and Instagram account.
In their investigation, authorities found Yu to have been involved in a number of fraud cases before and allegedly tried to lie low for the past seven years in Vietnam to avoid investigations here. Police believe Yu may have also embezzled company funds, according to an exclusive report by the JoongAng Ilbo. “Part of the investment funds into Donskoi International Exchange were used by Yu personally,” an acquaintance of Yu told the police. “The company money Yu used may be worth some billions of won.”
Police said once they analyze the computer data and bank records of employees as well as Yu’s family members who are also allegedly involved in the case, they will summon suspects for questioning.
BY KIM JEONG-YEON, KOH SUNG-PYO [email@example.com]