Nam-hee Kwon, CEO of Merge Plus, a company that caused a large-scale refund after promoting an 'unlimited 20% discount', and his younger brother, Bo-gun Kwon, the chief operating officer (CSO) were arrested and sent.
The Seoul Metropolitan Police Agency's financial crime investigation team arrested and sent CEO Kwon to the charge of violating the Electronic Financial Transactions Act and fraud today (17th).
CSO Kwon was also charged with business embezzlement and breach of trust under the Special Act.
Director Kwon Kang-hyeon, who was also arrested, was not sent as it was judged that he was only a representative in the name and was not involved in the actual operation.
CEO Kwon and CSO are accused of operating Merge Plus without registering as an electronic financial business.
The two were charged with fraud by selling hundreds of billions of won in cash equivalents in a round-robin fashion, and they were also charged with embezzling billions of won worth of Merge Plus affiliates' corporate funds.
Merge Point started its service in January 2019, offering an unlimited 20% discount at 20,000 affiliated franchise stores nationwide, including convenience stores, marts, and restaurants.
Accumulated 1 million subscribers and more than 100 billion won of cash money was issued, but the service was suddenly reduced in August, causing a 'eat-and-run controversy' and a refund crisis.
On the 9th, the court issued an arrest warrant for the brother and sister, saying, "There is a risk of escape."