By Kim Rahn
Staff Reporter
The organizer of an exclusive, private savings group of wealthy residents in southern Seoul said she had difficulty in managing the funds after she had borrowed money from loan sharks, police said.
Police are hunting other leaders of the traditional mutual financing union ― called ``gye'' ― which failed to pay money to some members when their savings matured.
An officer of Gangnam Police Station said the organizer, 51-year-old Yun, who was arrested for fraud and embezzlement, started the gye in 2002 with 13 of her friends. She named the group ``Dabokhoe'' in May 2004 and about 100 members joined.
The group now has some 300 members, each of whom pay between 2.5 million won and 25 million won in monthly installments, with the total funds being estimated at 220 billion won, according to police.
Since the middle of 2006, the union has had financial problems. ``Some members did not pay installments after receiving matured savings, so Yun borrowed money from loan sharks to make up for the installments. The loans have gotten bigger, with 20 billion won in principal and 30 billion won in interest,'' the officer said.
Yun admitted she had attracted members by bluffing that they could have a high return, with 4 percent in monthly interest, but denied the allegation that she used the money to buy a steel company or invest in real estate.
She had said there are no ranking public officials among the members, but recently said she is not sure because many gye members joined under false names. ``Some members claim Yun cited several ranking officials to gain trust from them. We may look into whether the officials were included, to confirm the allegation that they used the gye in laundering bribes,'' the officer said.
Police booked an accountant of Dabokhoe, who voluntarily appeared before police, without physical detention. They are hunting a co-organizer of the savings group and two other leaders.