Daeryun files complaint against 'Gallery K' on suspicion of Arttech fraud

On the 2nd, a complaint was submitted to the Metropolitan Investigation Team of the Seoul Metropolitan Police Agency.
Damage amount estimated at 980 million won... Second lawsuit inevitable

Amid a series of fraud losses surrounding so-called 'art tech', which profits from investing in works of art, Daeryun Law Firm, which is in charge of related class action lawsuits, has taken legal action by filing a complaint.

Daeryun submitted a complaint against Gallery K, a large art tech company, to the Financial Crimes Investigation Unit of the Metropolitan Investigation Division of the Seoul Metropolitan Police Agency at 11 am on the 2nd. The target of the complaint is Gallery K and its CEO and division head. They signed a 'consignment rental contract' that stipulates paying a monthly usage fee of approximately 7-9% of the purchase price to investors who purchased art through Gallery K.

They promised investors, "If you sign a contract, we will pay consignment rental fees for 3 years, and if there is a request for resale after 3 years, we will resell it at the purchase price." At the same time, Gallery K lured investors by emphasizing that if the artwork was not sold for a month, Gallery K would purchase it directly and guarantee the principal.

Afterwards, contrary to promise, victims continued to fail to recover their investments.

Payment of investment money in a roundabout way... Damage amount: 1 billion won

Gallery K, established in December 2017, increased its sales every year to ▲13 billion won in 2020, ▲24.5 billion won in 2021, ▲54.6 billion won in 2022, and ▲66.3 billion won in 2023. Last year, they carried out aggressive marketing, including selecting movie actor Ha Jung-woo as their advertising model.

Gallery K is also suspected of misappropriating the money by paying only a portion of the amount owed to artists and using the remaining amount as consignment fees and investment funds.

According to Daeryun, victim A purchased an artist's work for 60 million won in 2021 and signed a rental contract. Gallery K notified that the company's situation has recently become difficult, so it can no longer pay rental fees and resale has also become impossible. Another victim, Mr. B, also purchased two works of art for 52 million won, but received a similar notice.

They reportedly asked Gallery K where the art pieces they purchased were stored, but did not receive an answer. To date, 18 victims have expressed their intention to file complaints against Daeryun, and the amount of damage has been confirmed to be approximately 1 billion won.

Daeryun's lawyer Kim Myeong-seok explained, "Gallery K appears to have operated the company in a so-called Ponzi scheme, paying existing investors with purchase money received from follow-up investors without having a stable profit structure. Since the company received money after promising to pay investors the full amount or an amount exceeding this amount, it appears that they can also be charged with violating the law on the regulation of quasi-receipt activities."

He added, "Currently, additional victims are continuing to request complaints, so we have no choice but to file a second complaint sooner or later. Since the scale of the damage is very large, the investigative agency must quickly begin the investigation and prove the full extent of the crime."

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