Engineers make great vacuum, execs screw them over.

Almost as soon as we got into the discount biz, we started hearing the old “fell off the truck” line, implying that our deals were acquired through means other than the diligence and skill of our buyers. Heaven forfend! But today we bring you the very happy ending to a story of fraud, deception, and vacuum cleaners.

SPOILER ALERT: crime pays. Not for the criminals, in this case, but for honest retailers like us and consumers like you.

As far as anybody could tell from their stack of awards for well-reviewed products like the Moneual Rydis UV-C Vacuum, Moneual just looked like a Korean start-up with an unpronounceable name and some innovative ideas about vacuum cleaners. CNet certainly had good things to say about the Moneual Rydis UV-C, pointing out that “the UV-C light, coupled with the different cleaning modes, give this vacuum an edge over much of the competition.” So how did we get it so cheap? More on that in a second.

The Rydis vacuum’s (literally) killer feature is its UV-C light, which Moneual claims will kill dust mites and bacteria, sterilizing those nasties right out of carpet, upholstery, or any other fabric. If you’re thinking the idea of germicidal lights sounds as scammy as crystals or hologram bracelets, not this time. UV-C light kills microbes twice as much as normal vacs.

The engineers made a great vacuum. So what did the execs do?

Accusations are piling up that, while their engineers were diligently working to create the best handheld vacuums they could make, the company’s top execs were basically using the company as a front for massive fraud.

In October, Moneual stunned the Korean financial and business world by filing for receivership (essentially what you and I might call bankruptcy), after failing to pay some US$463 million in export bonds held by two of South Korea’s largest banks. Moneual’s claims of penury made little sense from a company that had claimed revenue of 1.27 trillion won (US$1.18 billion) in 2013. Where had the won gone?

The answer wasn’t long in coming. On October 31, Moneual founder Park Hong-seok was arrested by Korean authorities for filing false export documents, then using those inflated financials to secure huge loans to the tune of $3 billion. Along with buying a luxury island resort and taking lavish gambling junkets, Park is suspected of socking away over US$400 million in secret accounts in Hong Kong. A Korea Customs Service official called it “a large-scale fraud show.”

According to a Moneual employee speaking to the Korea JoongAng Daily, this show had been running since the day the company was founded in 2008. And the cast extended way beyond Park. “A lot of employees”, the anonymous employee says, “knew the company was rotten” as long ago as 2010. While a small team of designers and engineers worked on winning awards at the Consumer Electronics Show, the employee says, most of the “innovation” at Moneual was less wholesome. “It was easy to borrow loans by credit through cooked-up [export] revenue… The company said 90 percent of its sales were made in the U.S., but I have never seen our products in the U.S. market.”

It isn’t easy to pull off something like this alone, and prosecutors say Moneaul had help from the financial sector. The head of the Korea Trade Insurance Corporation, which had backed Moneaul based on the phony export figures, fled to the U.S. right before Moneaul filed for receivership. Investigations, as they say, are ongoing.

Moneaul’s engineers aren’t the only innocents caught in the fallout. Zalman Tech, known for their innovative PC fans and cooling systems, was acquired by Moneaul in 2011. It seems Moneaul was less interested in Zalman’s fans than in their potential as a vehicle for more fraud. Prosecutors say Moneaul inflated Zalman’s export reports just as they had done with the parent company’s. Cleared of any wrongdoing, Zalman has survived by the skin of their teeth in a court-supervised restructuring.

Just about the only people to come out of this ahead are us, and you! Like the opportunistic hyenas we must be to survive, we pounced on these Moneual Rydis UV-C Vacuums. Who would have thought all that dirty money could get your fabrics so clean?