'Rhyme Scandal' Former Vice President Lee Jong-pil Sentenced to 15 Years in Prison and Fined 4 Billion Won in First Trial

Court: "Severe harm to victims... No ethical awareness found as a financial investment professional"
Won Jong-jun, Lime CEO, sentenced to 3 years in prison and fined 300 million won; Marketing director receives probation

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] Lee Jong-pil, former vice president of Lime Asset Management (Lime), who was identified as a key figure in the 'Lime Asset Management (Lime) scandal' that caused damage worth approximately 1.6 trillion KRW, was sentenced to prison in the first trial.

The Criminal Division 12 of the Seoul Southern District Court (Presiding Judge Oh Sang-yong) on the 29th sentenced Lee, who was detained and indicted on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (bribery), to 15 years in prison and a fine of 4 billion KRW. Along with this, a confiscation order of approximately 1.44 billion KRW was also issued.

The court explained, "The defendant was aware of serious insolvency occurring in the International Investment Group (IIG) fund but concealed it through restructuring the mother fund," and added, "Even after the fund became insolvent to the extent that redemption of the underlying assets was difficult, the defendant continued to sell the fund without informing investors."

It continued, "Despite the enormous personal and social damage caused by the crime, the defendant continues to insist that there was no problem in performing his duties," and added, "It is difficult to find any ethical awareness that should be upheld by a financial investment professional managing assets worth trillions of won."

Lee was detained and indicted on charges of causing approximately 90 billion KRW in damage to a company invested in by the Lime fund by purchasing the company's bonds at an inflated price using funds from other funds in a 'Ponzi scheme' manner.

[Image source=Yonhap News]

Additionally, the court sentenced Won Jong-jun, CEO of Lime, who was indicted alongside Lee, to 3 years in prison and a fine of 300 million KRW. Lee Mo, who worked as the head of Lime's marketing department, was sentenced to 3 years in prison with a 4-year probation and fined 100 million KRW.

Since May 2017, Lime invested in five overseas trade finance funds, including the International Investment Group (IIG) fund, using fund investment money and total return swap (TRS) loan funds from Shinhan Investment Corp. Among these, insolvency occurred in the IIG fund, and Lee and others were indicted on charges of continuing to sell the fund by changing the management method to conceal the insolvency despite being aware of it.

In the previous sentencing hearing, the prosecution requested 15 years in prison, a fine of 3 billion KRW, and confiscation of approximately 1.44 billion KRW against Lee, stating, "The defendant's crime goes beyond simple incomplete sales; it actively deceived victims by concealing the fund's insolvency and selling the fund with false information to prepare redemption payments."

For CEO Won and Lee Mo, who were indicted together, the prosecution requested 10 years in prison and a fine of 500 million KRW, and 7 years in prison and a fine of 300 million KRW, respectively.

This content was produced with the assistance of AI translation services.