Seojung Art Center CEO Arrested on Suspicion of 110 Billion KRW Ponzi Scheme

[Financial News] The CEO of Seojung Art Center has been arrested on suspicion of orchestrating a Ponzi scheme worth approximately 110 billion KRW.
The Seoul Metropolitan Police Agency (SMPA) Metropolitan Investigation Unit Detective Mobile Team announced on the 24th that it had arrested Mr. Lee, the CEO of Seojung Art Center, on the 22nd on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Act on Regulation of Conducting Fund-Raising Business Without Permission.
Mr. Lee allegedly recruited investors by promising that if they purchased works by affiliated artists and entrusted them to the center for a year, they would receive monthly returns through exhibitions, advertising, and sponsorships. He also assured that if the artwork was not sold by the end of the contract period, the gallery would repurchase it to guarantee the principal. Police believe that approximately 800 people were defrauded of about 110 billion KRW through this scheme.
In May, Seojeong Art Gallery announced that its accounts had been seized and subsequently suspended royalty payments. As the principal was not returned and the company became unreachable, a series of lawsuits were filed by victims.
In June, police conducted searches and seizures at the Seojung Art Center headquarters in Nonhyeon-dong, Gangnam-gu, Seoul, as well as at Mr. Lee’s residence.
Police plan to continue their investigation, focusing on whether there were accomplices and the extent of additional damages, now that Mr. Lee is in custody.

425_sama@fnnews.com Choi Seung-han Reporter