Police Nab Co-Organizer of Private Savings Union
By Kim Rahn
Staff Reporter
Police arrested a co-leader of an exclusive, private savings union for wealthy Gangnam residents who went into hiding after the group became insolvent in November.
The co-organizer, Park, 52, voluntarily appeared before police recently and was arrested on suspicions of fraud.
Park had run the mutual financing group named ``Dabokhoe'' since 2004 with a woman identified as Yun, who was arrested last month. Park and Yun attracted hundreds of members by saying that they would get high investment returns and amassed funds totaling 220 billion won ($170 million).
However, they failed to pay members when their savings matured, causing 148 members to see losses of 37 billion won. Dozens of them filed complaints with the organizers.
Police said the two failed to manage the funds properly, and even borrowed money from loan sharks as some members did not contribute as planned. ``They had neither the ability nor the intention to pay money members,'' a police officer said.
Park claims that Yun plotted the fraud and he just followed her orders, but police said they had obtained evidence of his active role.
Dabokhoe is not the only financing union to have failed and become involved in lawsuits in affluent southern Seoul. A woman surnamed Kwon recently filed a suit against the organizer of her savings group, ``Cheongsolhoe,'' after he disappeared without paying her 1.3 billion won.
Another group named ``Hanmaeumhoe,'' the total funds of which were estimated at 15 billion won, also collapsed. One member filed a complaint against the organizer to get her 39 million won back.
``The insolvency of such savings groups is having a domino effect, as some members fail to pay dividends amid the economic slump. Some investors joined several unions simultaneously, getting money from one group and giving it to another. Hence, if one union goes bankrupt, it causes a chain reaction,'' the officer said.