Four people, including former Lime Asset Management Vice President Lee Jong-pil, who were brought to trial on charges including siphoning off about 30 billion won from a Lime Asset Management fund during the "Lime scandal," were sentenced to prison terms at the first trial.
The Seoul Southern District Court Criminal Division 15 (Presiding Judge Noh Yu-kyung) held a sentencing hearing on Aug. 28 for Lee and three others — a person surnamed Chae, 47, a person surnamed Park, 51, and a person surnamed Kim, 49 — indicted on charges including violations of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud, breach of trust, and embezzlement).
The court sentenced the former vice president to 10 years in prison, Chae to seven years, and Park to six years. Kim was sentenced to three years in prison, suspended for five years.
The court also ordered Chae to forfeit about 3.2 billion won and Park about 3.7 billion won.
The court found Lee, the former vice president, and Kim, the former Metropolitan chairman, guilty of all charges that, during the acquisition of the Isla Casino in Cebu, the Philippines, they deceived the Lime Asset Management risk management working committee to obtain 30 billion won and then burdened Metropolitan with about 30 billion won in debt.
The court said, "Kim appears to have acquired the casino out of personal interest, and there are no indications of operation at the Metropolitan level," adding, "It is recognized that, according to a division of roles, they prepared an investment review report that distorted the casino's sales and operating profit and failed to properly disclose the illegal gambling operation, thereby deceiving the committee."
It continued, "The claim that individual investors are fraud victims is hard to accept because, under the private bond contract, the investment funds are structured to belong to Lime Asset Management," and found all the fraud and breach of trust charges guilty.
Chae and Park were also found guilty of embezzling company funds by siphoning off about 21 billion won in investment funds and falsely drawing salaries in the process of acquiring and operating a corporation based in Paju.
As for Park's gain without paying funds during a paid-in capital increase, although the person was initially indicted on embezzlement, the charge was changed to breach of trust during the trial, and the court found it guilty.
By contrast, the charge under the Specific Economic Crimes Act that Lee and others deceived Lime Asset Management with false materials to siphon off fund money resulted in a not-guilty verdict.
The court said, "Based on the evidence submitted, it is insufficient to recognize that the defendants, through deception or collusion, caused the Commissioners to misunderstand and receive the fund."
The charge that the former vice president instigated Chae to commit perjury during testimony in another case was also found not guilty.
Regarding the former vice president's letters and conversations submitted as key evidence, the court explained, "They lack an objective correlation with the suspected facts in the issued search and seizure warrant and cannot be used as evidence," adding, "The remaining evidence alone is insufficient to recognize instigation of perjury or false testimony."
On the sentencing reasons for the former vice president, the court explained, "Lee, as Lime's chief operating officer, had significant influence and should have been fair, but oversaw a crime amounting to 30 billion won by deceiving working-level Commissioners," adding, "By using a position in the financial industry to obtain private gains and undermine the foundation of the economic order, the culpability is grave, and the damage to retail investors is difficult to recover."
For Chae, the court weighed against the person the fact that the person played a bridging role between the former vice president and the other defendants and was deeply involved in the overall crime by overseeing practical affairs. For Park, the court considered as sentencing factors the person's participation in the crime that caused enormous damage and the lack of sincere remorse.
Chae and Park, who were sentenced to prison terms, had their bail revoked and were taken back into custody in court.