The Supreme Court ordered a retrial of the appellate ruling that sentenced Chairman Lee Sang-eun of Huestem Korea, who faces allegations of a multilevel marketing scam worth over 1 trillion won, to seven years in prison. The court indicated that the appellate court should have accepted the prosecution's motion to amend the indictment to extend the period of Lee's crimes from four years to four years and nine months and to expand the amount involved to the 3 trillion won range.
The Supreme Court's Third Division (Presiding Justice Lee Suk-yeon) said on the 21st that it has overturned the appellate ruling in Lee's case on violations of the Door-to-Door Sales Act and remanded the case to the Seoul High Court. On Apr. 2, the appellate court found Lee guilty of the multilevel marketing scam charges and sentenced him to seven years in prison and a fine of 1 billion won.
Lee and Huestem Korea's management were found to have created a multilevel scheme disguised as an agricultural association corporation and collected about 1.1942 trillion won in membership fees from 100,000 people between March 2019 and February 2023.
They were said to have promoted that Huestem Korea was conducting a platform business that "connects producers and consumers of agricultural, livestock, and fisheries products." They reportedly said that if people paid the membership fee, they would inflate it by 2.6 times. However, a prosecution investigation found they used members' money to pay other members' revenue in a Ponzi-like rotation, and when the funds dried up, they went bankrupt.
The first trial sentenced Lee to seven years in prison and a fine of 1 billion won. In the appellate trial, the prosecution applied to the court for permission to amend the indictment. The application sought to extend Lee's group's crime period by nine months from the original and to expand the membership fees collected from members to 3.3 trillion won.
However, the appellate court did not grant permission to amend the indictment and imposed the same sentence on Lee as in the first trial.
The Supreme Court held that the appellate court should have granted permission to amend the indictment. The Supreme Court said, "The facts of the case the prosecutor sought to change constitute a single composite offense with the existing facts of the case." It added, "This is because it concerns a series of acts of continuously recruiting members over a certain period using the same method and collecting membership fees."
The Supreme Court also said the appellate court should have considered that Lee received a final sentence of two years and six months in prison for a sex crime during the course of this trial when determining the sentence. Under the Criminal Act, when a person is tried for two different crimes, the sentence already finalized must be considered when determining the sentence for the other crime.
Meanwhile, in the first trial of this case, controversy erupted over so-called preferential treatment for former officials when attorney Lee Jong-geun, husband of Rebuilding Korea Party lawmaker Park Eun-jung, served as legal counsel for Lee and the company. As a prosecutor, Lee received first-class certified specialist prosecutor status (black belt) in the field of multilevel and illegal fundraising cases. However, while defending a defendant in a multilevel scam as an attorney, he was reported to have received a large retainer. He resigned as defense counsel after the controversy.