May 9, 2019
Faux Treasure-seekers jailed
A South Korean court has sentenced three business executives to prison after they were found guilty of falsely claiming to have found a long-lost treasure-laden shipwreck. Yes, you read that right.
In July last year, the Shinil Group claimed it had found the Russian cruiser Dmitrii Donskoi, a vessel that sank in 1905 and has since been rumored to be holding gold valued at billions of dollars. As a result of the claim, Shinil Group reaped more than $7.6 million from thousands of excited investors.
At the same time, however, suspicions abounded: reports that the news was a scam gained in popularity, while the group refused to comment.
The Shinil Group claimed that the Donskoi carried about 200 tonnes of gold; earlier this week, a Seoul court ruled this to be a lie.
The vice-chairman of the group, known only as “Kim”, was subsequently issued a five-year prison term, while the former head of the group, surnamed “Ryu”, and another accomplice was sentenced to two years and four years in prison, respectively.
“Their responsibility for the crime is very heavy, given the method and scale, as it’s a case where they swindled many unspecified people and took huge gains,” Judge Choi Yeon-mi said in court.
The Donskoi was sunk by its crew in 1905 following Japan’s victory in the Battle of Tsushima, a key moment of the Russo-Japanese War. Ever since then, there have been persistent rumors that the ship was, in fact, carrying a substantial amount of gold for Russia’s Pacific Fleet, destined to pay crew salaries and docking fees. If true, the gold on board would be worth billions of dollars in contemporary terms.
Reports of the gold discovery first emerged last summer, with the Shinil Group claiming that its divers had discovered a wreck identified as the Donskoi. The Group had reportedly been searching for the vessel for years, eventually locating it at a depth of 1,400 feet a mile off the Korean island of Ulleungdo.
By releasing photos and videos taken by search submarines, the company claimed some 200 tonnes of gold bars and coins worth $180 billion were likely still on board, leading to an investor frenzy that forced even the South Korean financial regulator to issue a public warning against possible losses. Some estimates put the total invested at more than $8 million in the wake of the firm’s announcement.
In many ways, then, this faux wreck may have been a public relations victory as much as a legal and financial disaster for many. To their credit, however, authorities were quick to respond to the scam: a travel ban was placed on Shinil Group CEO Choi Yong-Seok, and the firm’s offices raided soon thereafter by Seoul police.