Victims of Korea’s largest pyramid scheme claim fugitive faked his death


Conspiracy theories abound over the death of Cho Hee-pal, one of Korea’s most wanted scammers, who fled the country in 2008 after swindling thousands out of 3.5 trillion won ($3 billion).

According to Korean police, the 55-year-old fugitive died of a heart attack five months ago in China, where he lived for more than three years under a fake identity.

He was the main suspect in a massive pyramid scheme that resulted in more than 30,000 investors being defrauded out of at least 3.5 trillion won. It is the largest-ever pyramid scheme in Korea, with victims claiming that the total damages amount to 8 trillion won.

Despite the police announcement, many victims believe that Cho is still alive, living a life of luxury with the money he conned out of them. They claim Cho faked his own death.

“None of us believe he’s dead,” said Kim Sang-jeon, the head of a victims’ group called the Citizens’ Coalition for Respectable Household Economy.

His organization has tracked Cho for years in the hope of bringing him to justice and recouping their money.

“We can’t help but question why the police made such an announcement based on fishy evidence at this particular point in time,” Kim said.

He pointed out that a prosecutorial probe into the case was expected to gather momentum, with the extradition of two of his accomplices, who were also on the run in China.

Cho’s death is backed by plenty of documentary evidence, but no DNA. There is a death certificate, medical records written by emergency room doctors, a cremation certificate and even video footage of a funeral service showing Cho lying in a coffin.

He was cremated in China and his ashes were later brought back to Korea by his family.

Cremation destroys all DNA information, so it is impossible for the police to identity the remains, an official at the National Police Agency’s intellectual crime investigation unit said.

“Through Interpol, we verified the authenticity of the death certificate by showing Cho’s photograph to the doctor who pronounced him dead,“ Park Gwan-cheon, the policeman, said.

Victims, however, are far from convinced.

The evidence may have been fabricated, just like his Chinese identification card, driver’s license and passport, they claim. 

Also fueling their suspicion is a video recording of what appears to be Cho’s funeral, attended by his relatives. In the 51-second clip, a man who looks like Cho lies in a coffin, with his body, except the face, covered with a red cloth.

Some people say such a funeral video recording, very unusual in Korean culture, is proof of a faked death. A Korean wouldn’t videotape a funeral service, unless they wanted to make up evidence of someone’s death, they argue.

An official at the National Forensic Service was quoted by local media as saying that he couldn’t tell whether the person in the coffin was dead or alive.

According to police, on Dec. 18, Cho dined, drank and sang with his Korean girlfriend at a hotel in Qingdao, and suddenly complained of an acute stomachache. He stopped breathing while being taken by ambulance to hospital, where he was pronounced dead by doctors. A heart attack was given as the cause of death.

Cho lived in Yantai, just one and a half hour’s flight from Incheon, disguised as a 53-year-old ethnic Korean, Cho Young-bok, or Cao Yongfu.

In 2004, he set up a pyramid-selling company in Daegu and opened more than 10 branches in other cities, including Seoul, luring thousands of investors with the promise of high returns.

He escaped to China on a fishing boat in December 2008, along with his accomplices, after Daegu prosecutors began probing his company.

Suspicions over his death stem partly from the victims’ mistrust in the authorities’ handling of the case.

They suspect that Cho, using the astronomical proceeds from the pyramid operation, may have bribed police investigators and other officials.

In fact, a Daegu police officer in charge of Cho’s case was removed from his post after allegations that he took 900 million won from Cho just before he sneaked out of the country. Coastguards also faced suspicions that they let Cho go intentionally, despite tip-offs on his plan to escape by sea.

A Korea Coast Guard vessel followed the fishing boat carrying Cho and his accomplices to the border with China, but failed to snatch them. The officials later explained that they mistook it as a drugs trafficking attempt and had intended to nab those on board when the boat met its Chinese supplier.

The police, announcing Cho’s death, said they would continue efforts to trace the money. But with Cho dead, either in reality or only on paper, it looks less likely that the investigators will break a years-long deadlock in the mammoth fraud case.

By Lee Sun-young (milaya@heraldcorp.com)