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Korean criminal ring selling fake dividend stocks busted in Thailand

Published: 09 May. 2025, 16:19

A photo released by police on May 9 shows a member of an investment chatroom scam being apprehended. Based in Thailand, the group posed as a Korean brokerage firm and lured investors by falsely claiming they could provide institutional dividend stocks at discounted prices. [SEOUL METROPOLITAN POLICE AGENCY]

A criminal ring that posed as a domestic brokerage firm to lure investors with fake promises of discounted dividend stocks reserved for institutional investors has been apprehended by police.

The Seoul Metropolitan Police Agency’s financial crimes investigation unit announced on Friday that it had referred 11 members of the ring for prosecution on charges including organizing and participating in a criminal group. Nine of them have been taken into custody.

The group operated out of Thailand, where it ran a so-called “investment leader chat room” to swindle retail investors. Starting in mid-August last year, the suspects posted advertisements on portal sites offering free investment information and recruited victims through social media platforms.

They impersonated employees of legitimate securities firms and encouraged victims to invest in initial public offerings (IPOs), claiming to have access to shares allocated to institutional investors.

The scammers falsely told victims they could purchase IPO shares at below-market prices. To gain credibility and quell suspicion, the group reportedly developed a detailed script and scenario to deceive potential victims.

Authorities also found that the suspects had accessed a database of roughly 2.84 million Korean phone numbers to search for new targets. Police said they are investigating how the suspects obtained the database.

Police believe a major loss was averted thanks to a swift crackdown conducted in Thailand just six days after the scam began on Aug. 16 last year. The operation was launched after a police liaison officer stationed in Thailand received intelligence on the group’s activities.

Investigators recovered 22.76 million won ($16,200) in funds that the group failed to withdraw. Of that amount, 22.61 million won was returned to victims. Individual losses ranged from 1 million to 15 million won.

A 53-year-old, who oversaw investment operations for the ring, was arrested and indicted on charges including fraud, attempted fraud, violating the Act on the Aggravated Punishment of Specific Economic Crimes and concealment of criminal proceeds.

A 26-year-old, identified as the group’s domestic coordinator, and a 27-year-old, who had already been detained for a separate case, were also caught.

All suspects in the case are Korean nationals. The 53-year-old who was known among the group as “Chairman,” had previously been involved in a voice phishing operation in 2023 but had evaded arrest until now.

“The police will continue to pursue and severely punish criminals who carry out systematic fraud against the public, under a strict zero-tolerance policy,” authorities said. “There is always risk in investment, and people should be wary of any claims that guarantee principal protection or high returns."

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY SHIN HYE-YEON [[email protected]]