SEOUL, Nov 26: Police said on Wednesday they have busted South Korea’s biggest-ever “pyramid” financial scam involving nearly $2.6 billion collected from tens of thousands of investors.

They said they are hunting 14 swindlers, including Cho Hee-Pal who is accused of raising about 3.9 trillion won ($2.6 billion) from more than 30,000 investors.

Cho, 51, established a company called BMC in 2004 to lease medical devices to hospitals, bathhouses and beauty salons and recruited investors the way multi-level merchandising firms do.

He and other suspects fled early this month when police launched an investigation in two cities, Daegu and Daejeon.

“This is the country’s largest pyramid fraud case.

The amount of money involved and the number of victims have been swelling,” said Kwon Duk-Eon, a police spokesman in Daejeon.

“Many investors may not retrieve their money because it’s hard for investigators to track the bank accounts of Cho’s group,” he said.

Police said Cho’s company lured investors, mostly middle-aged or elderly women with scant financial knowledge, with the promise of high returns. Many reinvested their dividends in the company.

Police arrested the company’s vice chief on Monday, and charged 103 employees without ordering their detention.—AFP