A South Korean court has sentenced several business executives to prison after they tricked investors out of millions of dollars in a fraud involving a supposedly ‘treasure-laden’ Imperial Russian shipwreck.
The executives attracted $7.6 million from investors after claiming that the ship contained a massive 200 tons of gold, according to Yonhap News Agency. Estimates indicated that the purported gold haul would be worth a staggering $132 billion.
Yonhap reports that the claims of sunken treasure were found to be groundless. On Wednesday, a court in Seoul sentenced a number of people to prison terms over the scam.
The former vice chairman of the business formerly known as Shinil Group, identified only by his surname, Kim, received a 5-year prison sentence, according to Yonhap. The former head of the group, identified by the surname Ryu, received a 2-year sentence, Yonhap reports, adding that another key accomplice was sentenced to 4 years in jail.
Last summer, salvage company Shinil Group said that the stern of the vessel, the Dmitry Donskoi, had been discovered off South Korea’s Ulleungdo Island, attracting massive attention across the globe. The ship was badly damaged following an attack by Japanese warships during the Russo-Japanese War and was scuttled in the Sea of Japan on May 29, 1905.
News of the supposed 'discovery' sparked an investor frenzy in South Korea, prompting the country’s financial regulator to issue a warning against possible investment losses.
There was, however, plenty of skepticism about the veracity of the supposedly amazing ‘discovery’ and experts had long questioned the rumors of sunken treasure that swirled around the Dmitry Donskoi. According to The New York Times, one historian told Bloomberg in 2000 that it would have been safer to send the gold to the Russian Pacific port of Vladivostok by rail, as opposed to using a ship.
Some experts also said it was unlikely that the Donskoi, a thickly armored warship with more than 12 artillery pieces, 500 sailors and presumably 1,600 tons of coal, would have had room for 200 tons of gold, which at the time of the ‘discovery’ was double the current gold reserves at South Korea's central bank. Similar skepticism was expressed on social media.
The Associated Press contributed to this article. Follow James Rogers on Twitter @jamesjrogers