Multi-level Scam King Joo Soo-do, Sentenced to 10 Years in Prison by Supreme Court for 'Prison Fraud'

[Asia Economy Reporter Bae Kyunghwan] Joo Soo-do, former chairman of JU Group, who is serving time for a multi-level marketing scam worth over 2 trillion won, has been sentenced to an additional 10 years in prison. Joo, who was serving a 12-year sentence confirmed by the Supreme Court, committed another fraud while in prison.

On the 20th, the Supreme Court's 3rd Division (Presiding Justice No Tae-ak) announced that it upheld the original sentence of 10 years imprisonment and a fine of 44.4 billion won against Joo in his appeal trial on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud).

Joo was the mastermind behind the so-called "largest fraud since Dangun," a multi-level marketing scam involving over 2 trillion won. In October 2007, he was sentenced to 12 years in prison by the Supreme Court and was incarcerated at Seoul Detention Center, where he committed "prison fraud" and was subsequently prosecuted.

The JU Group, chaired by Joo, consisted of 25 companies including multi-level marketing firms such as JU Network, JU Phoenix, SL Tech, and door-to-door sales company JU Department Store. In 2005 alone, JU Network defrauded 93,118 salespeople of 1.8442 trillion won under the pretext of purchasing goods as investment funds, and from the end of 2005 to June 2006, JU Department Store defrauded 21,545 salespeople of 266.3 billion won. The Supreme Court confirmed the 12-year sentence in October 2007.

However, even while incarcerated, Joo used close associates to operate the multi-level marketing company "Human Living" for one year starting in 2013, collecting 113.7 billion won from 1,329 victims under the guise of investment funds. Joo also transferred 1.1 billion won of embezzled company funds and 3.1 billion won in fictitious goods payments from prison to a nominee company.

The first trial mostly acknowledged Joo's charges and sentenced him to 6 years in prison. In the second trial, although he was acquitted of the violation of the Audit Act recognized in the first trial, an additional 1.5 billion won of fraud was acknowledged, increasing the sentence by 4 years.

Joo appealed, arguing that the scale of the fraud was unclear and that the Act on the Aggravated Punishment of Specific Economic Crimes, which applies different punishment standards based on the amount of criminal proceeds, could not be applied. However, the Supreme Court dismissed the appeal, stating that matters not examined by the lower court cannot be grounds for appeal.

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