Three executives and employees, including the head of the beef charcoal-grill franchise "Hanyang Hwaro," have been arrested on charges of deceiving investors with false information and siphoning off 200 billion won in investment funds.
Seoul Gangnam Police Station said on the 10th that it arrested three people, including the Hanyang Hwaro head and vice president, on the 1st on charges including fraud and violating the Act on Similar Receiving of Funds.
Police said that in 2022, they lured more than 350 investors by claiming, "We can generate a lot of revenue by importing top-grade beef from Canada at low prices and distributing it domestically," and then stole about 200 billion won in investment money.
They reportedly offered to pay 10% of the investment each month and return the principal after 10 months, but did not pay back the principal. The person introduced to investors as a "Canadian ranch owner" was also said to have actually been a regular butcher shop owner.
Starting early last year, police received complaints from victims across the country, and Gangnam Police Station was designated as the lead agency to investigate. During the investigation, the number of victims increased from 150 to more than 350. The amount of damage also surged from about 20 billion won to about 200 billion won.
Police plan to refer seven executives and employees, including the three who were arrested, to the prosecution today.
Previously, Hanyang Hwaro rapidly increased its number of franchises by touting cost-effective beef. It boosted recognition by hiring actor Ma Dong-seok as an advertising model. However, since 2020, it has posted annual losses and fallen into capital impairment.