8 indicted for exploiting students in pyramid scam

By Kim Bo-eun

The Seoul Metropolitan Police Agency said Tuesday it indicted eight people for deceiving students into a pyramid scheme by telling them they would earn jobs.

Investigators said the suspects set up a training site and lodgings in eastern Seoul in July 2009 and forced 146 students to live together to receive training and buy products from them since then.

They allegedly made some 460 million won ($407,000) by making the students buy merchandise at exorbitant prices.

One suspect was identified by his surname Choi. Police said Choi and two others had worked as agents for a similar pyramid scheme in Sonpa-gu, southern Seoul until June 2009 when each of them was fined 2 million won. They were presumed to have relocated to eastern Seoul to avoid police crackdowns.

Investigations showed they lured their victims by telling them they would offer them jobs as assistants at broadcasting stations or lifeguards at water parks.

Police said the victims at first stayed together for several days as they received instructions for 19 hours a day on how to lure new people into the scheme. Although they realized that they had been conned, they could not quit because Choi was watching over them.

The fraudsters made the victims buy items such as coffee, toothpaste and vitamins at 10 times the original price and said if they brought in new people they could get 17 percent of what the new people paid to buy the products.

They demanded that the students ask their parents to send them money. They also told the students that they could be promoted to high-ranking positions if they bought many products.

Police said the victims could not easily quit not only because of Choi watching them but also because they had their money at stake.

The police started the investigation after one of the victims, surnamed Shin, escaped the lodging facility and requested help from her parents.