Police have arrested and referred to prosecutors a group of money handlers and unregistered currency exchangers involved in laundering criminal proceeds for a Cambodia-based phishing organization. Some of them moved Tether between domestic and foreign exchanges before converting it into cash, and the laundered money was again used as bait funds for investment fraud operations, the investigation found.
The Metropolitan Investigation Unit of the Seoul Metropolitan Police Agency said Tuesday it had arrested and referred 56 suspects on charges of laundering phishing proceeds or conducting illegal currency exchange using cryptocurrency exchanges. Among them, two key suspects were placed under arrest.
The crimes uncovered in the police investigation fall broadly into three categories. First, nine people including a suspect identified as A are accused of receiving about 14 billion won worth of Tether from foreign exchanges between February 2024 and April this year, on the instructions of Y, the ringleader based in Cambodia. They are believed to have sold the cryptocurrency on domestic exchanges before sending the proceeds to shell company accounts managed by Y. Police also confirmed circumstances indicating the money passed through some 11,000 accounts and was used as initial enticement funds for investment fraud and other schemes. The method involves first paying victims money that appears to be profit in order to induce additional investment.
Fourteen people including a suspect identified as J are suspected of laundering about 2.8 billion won in proceeds while operating as members of a Cambodia-based romance scam organization. They are believed to have purchased the criminal proceeds as Tether on domestic exchanges, converted it into local currency, and remitted it to the organization’s ringleader and others. The process involved more than 310 accounts, including accounts under their own names and illegally obtained bank accounts. Police believe the laundered funds were used for the organization’s operating expenses. J and the others have already been arrested and referred to prosecutors by the Daegu Metropolitan Police Agency’s Criminal Investigation Mobile Unit on romance scam charges of defrauding 79 victims of about 4.4 billion won.
Thirty-three people including a suspect identified as K are accused of illegally exchanging about 6.3 billion won using cryptocurrency, charging set fees to foreign tourists and acquaintances. They are believed to have purchased and transferred Tether on domestic and foreign exchanges before paying out in foreign currency or won.
Police believe the nine people including A and the 14 including J illegally exchanged about 16.8 billion won across 24,500 transactions between February 2024 and April this year. An analysis of about 11,300 related accounts also confirmed 265 cases of voice phishing and investment fraud, involving damages of about 25.7 billion won. Police have taken pre-indictment seizure and preservation measures against about 650 million won in criminal proceeds the suspects obtained through money laundering. An Interpol red notice has been issued for Y, the ringleader staying in Cambodia.
“Acting as an agent for someone else’s cryptocurrency transactions or exchanging it into won can also be subject to punishment,” police said. “We will continue to conduct thorough investigations to eradicate money laundering and illegal currency exchange crimes.”
