Three men were arrested on fraud charges for luring investors into a fake development project on the site of the Indonesian embassy here, said police officials on Wednesday.

According to the Seoul Metropolitan Police Agency, the three men falsely led investors into believing that a profitable multi-purpose complex would be built where the embassy currently stands and then disappeared with the investments.

Police said they have found that the suspect surnamed Kwon, his nephew and Jung had embezzled some 2 billion won ($1.75 million) from seven investors. The trio’s full names were undisclosed to the media. Starting in 2009, the three had amassed investments, telling people that the Indonesian embassy in Yeouido would be relocated and that a 36-story complex would be built in its place.

According to police, Kwon and the rest lured investors by telling them that the 4-building multi-purpose complex would bring in some 130 billion won in revenue.

The scammers made their project believable by forging official documents from Indonesia’s foreign ministry and other documents and by claiming to have received business permits from the government, police said.

They also used a dummy corporation to create contracts with a well-known law firm here and set up consulting projects with the Korea Real Estate Investment & Trust company and The Korea Development Bank, they said.

According to police, Kwon and his nephew fled to Indonesia shortly after the crime, but were arrested through the help of the International Criminal Police Organization.

By Robert Lee (robert@heraldcorp.com)