Former Boohwal singer Kim Jae-hee implicated in W200 bil. Ponzi scheme

Kim Jae-hee, formerly of the rock band Boohwal / Captured from his social media

A former member of the rock band Boohwal has been identified as one of 69 people forwarded to prosecutors for involvement in a Ponzi scheme that collected more than 200 billion won ($150 million) from illegal investments and stole 19 billion won.

Police said singer Kim Jae-hee, 54, who once performed as Boohwal’s fourth vocalist, took part in promotional activities that helped recruit victims.

According to the Incheon Metropolitan Police Agency on Sunday, Kim was among those sent to prosecutors on charges including fraud and violations of related laws.

Two ringleaders, a 43-year-old identified as A and a 44-year-old identified as B, were arrested earlier, while Kim and 67 others were booked without detention.

Police said A and B ran the operation from December 2022 to August 2024 out of their headquarters in Seoul’s Gangnam district.

They raised 209 billion won from about 30,000 people and stole 19 billion won from 306 of them. The group lured investors by claiming that funding an online shopping mall business would guarantee repayment of the principal and return 150 percent of the investment over 300 days, paying 0.5 percent daily. They also promised guaranteed principal and 40 percent interest for those who invested in a planned overseas bank.

Investigators found that the group created a three-tier “adviser-brunch-ambassador” structure and operated 35 branches nationwide to attract more investors.

Kim, who was registered as a vice chair and internal director, used his public profile to visit branches, host business briefings, and encourage people to join.

Police said Kim did not invest in the business himself but attended events to promote it and performed songs. He received 100 million won in salary and additional benefits including a passenger vehicle valued at 60 million won to 70 million won and gold items worth about 80 million won.

Kim, the younger brother of the late Boohwal vocalist Kim Jae-ki, reportedly told police he “did not know it was a scam.” He performed as the band’s vocalist in the 1990s.

The scheme collapsed when A and B could no longer pay supposed returns to earlier investors. Most victims were in their 60s to 80s, investing amounts ranging from 1 million won to more than 1 billion won each. Some used cancer treatment funds or home redevelopment compensation money, leaving their livelihoods at risk.

Police analyzed 40,000 transactions across 22 bank accounts used by the group and identified 9.38 billion won in criminal proceeds, for which they requested pre-indictment preservation. “We believe additional victims may come forward,” a police official said.

This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by generative AI and edited by The Korea Times.