[비즈한국] A "Ponzi scheme" utilizing masks, which have become a necessity since the spread of COVID-19, has emerged, drawing significant attention. Brokers are recruiting investors by using massive mask contracts as bait. Despite the absurd nature of the contract terms, the number of investors appears to be growing, raising concerns about substantial future losses.
Following our report last year, "'100 Billion Masks Ordered?' Fraudulent Brokers Thrive After Mask Shortage," BizHankook received additional tips from an informant, Mr. A. "At the time, I thought mask brokers were just blinded by greed and trying to connect buyers with factories," A stated. "However, after participating in the actual contracting process as an introducer, it became clear they had no interest in actually closing deals. They had a completely different method for generating profit."
Mr. A explained, "First, the brokers get official seals on performance bond documents from both prospective buyers and manufacturers. You might wonder which company would stamp such a document before an actual contract, but the brokers reassure them by saying, 'We will make a 50 million won advance payment as a guarantee of this contract's validity. In exchange, if any false information is found regarding the company's details, you will be liable for a penalty two to three times that amount.' Once they get the seal, they make excuses and delay the promised advance payment."
Mr. A added, "It seems the brokers scan the contract performance documents with the official seals and then reuse them for various other companies. Other companies are then pressured to place their own seals on the documents the brokers have already prepared. When I requested to draft a new contract because the scan quality was poor, they got angry, asking why I was creating extra work when they already had everything ready."
Later, Mr. A sent an acquaintance, Mr. B, who runs a mask manufacturing business and is well-versed in the industry, to the office where the brokers worked. "I had sent enough documents and felt it was time to finalize the contract, so I visited the office," Mr. B explained. "But they wouldn't talk about the contract; they just kept making excuses. When they couldn't answer my pointed questions and started to panic, I became convinced they were scammers. I decided to pull out of the deal."
Mr. B claims there was one more aspect that suggested the company was a scam. "The building elevator was full of middle-aged women, presumably in their 50s and 60s, besides myself. Everyone got off on the same floor and headed to the same office. While I was there to close a deal, they seemed to have a different purpose. Watching from the side, I saw the office staff sitting them down, showing them videos of mask factory operations and the contract performance documents stamped with various official seals, and explaining investment opportunities to them."
According to Mr. B, it is suspected that these brokers are using the performance documents and materials obtained from companies for a so-called "Ponzi scheme." A Ponzi scheme is a type of multi-level financial fraud where returns are paid to existing investors using money from new investors.
BizHankook visited the office mentioned in the reports on the 21st to verify the facts. The streets around the building were unusually crowded with middle-aged women. When we asked those leaving the building about the mask investments, one woman replied, "We aren't recruiting investors right now. The fundraising goal has been met. We were going to bring in more machines to recruit further investors, but they said there was no need to push for more investors since they are already paying out high-interest returns. They will start recruiting again in May," and told us to go away.
When asked about the investment method, she explained, "There are two ways. You can pay 1.5 million won or 33 million won. The yield depends on the amount. For 1.5 million won, they give you 100,000 won in profit every week. That totals about 5.4 million won a year. Safeguards against principal loss are in place, and profits are actually being generated. I also received 1,000 masks as a gift."
She continued, "This company focuses on exports. I understand they have secured four years' worth of orders. I heard they lacked enough mask-making machines to keep up with the flood of orders, which is why the company is recruiting investors. I've heard that after hearing about the company's vision, some people are even willing to invest up to 2 billion won."
Informant Mr. A said, "At first, I thought these brokers entered the mask market to take deposits and go into hiding, or to sell Chinese mask-making machines using contracts as bait. But now, it seems they are even pulling in innocent citizens to carry out their fraudulent acts. I reported this to the police, believing this probably isn't the only such place. However, the police said it's difficult to proceed with an investigation if there are no victims yet. I hope investors can escape these brokers' vicious schemes before any real victims emerge."