- 28 months ago
Newegg is accused of helping tech manufacturer Moneual defraud several South Korean banks to the tune of over $200 million.
Moneual's scheme was to apply for loans to several banks, and present large purchase orders from Newegg and ASI Corporation as evidence of future revenue, helping assure bankers that the loans would be repaid. Moneual was able to secure over $3 billion in loans this way. Problem: The purchase orders were fake. Moneual's CEO, Park Hong-seok, was convicted in 2015, sentenced to 23 years in prison (later reduced to 15 years), and ordered to forfeit $31 million.
Now Newegg and ASI Corporation are accused of willful participation in the scheme, and have been sued by the banks to recover the remaining balance, totaling roughly $230 million. Newegg has denied the charges, saying, "Newegg prides itself on conducting business fairly, ethically and honestly. The company vehemently denies the allegations in the complaint filed last week, and Newegg intends to vigorously defend itself against those unfounded charges."