Cousin and Friend's Money... Staff at Insurance Agency Involved in 1.6 Billion Won Fraudulent Fundraising Receives Suspended Sentence

[Asia Economy Reporter Kim Daehyun] An employee of an insurance agency company was sentenced to a suspended prison term in the first trial for receiving a total of 1.6 billion won from relatives and friends under the pretext of investing in the company's insurance products.

According to the legal community on the 13th, Judge Joo Jinam of the Criminal Division 15 at the Seoul Central District Court recently sentenced A (36, male), who was indicted for violating the Act on the Regulation of Similar Financial Transactions, to one year in prison with a two-year suspension.

Earlier, A was prosecuted for working as a staff member at insurance agency company B from 2014 for about six years, selling insurance-related installment savings and deposit products developed by the company. A is accused of conspiring with the CEO and internal directors of B, who developed the insurance products, to recruit investors as an employee.

A told about 20 people, including his cousin, maternal aunt, and friends, "If you invest in B's insurance products, the principal and interest will be guaranteed by the commission earned through the contract," and it was investigated that he received a total of about 1.6 billion won as investment funds. Separately from A, the CEO and internal directors of B were arrested and indicted on fraud charges in November last year.

The current Article 3 of the Act on the Regulation of Similar Financial Transactions stipulates that "no one shall engage in similar financial transactions," and Article 6, Paragraph 1 of the same law provides that violators shall be punished by imprisonment for up to five years or a fine of up to 50 million won. Similar financial transactions refer to acts of soliciting funds from unspecified many by promising high returns in places other than financial companies, causing damage.

The court said, "Most investors did not properly receive their invested funds back, and the defendant appears to have gained considerable economic benefits by participating in the crime," adding, "Considering the defendant's confession, the fact that he was not the main perpetrator but only simply involved, and other sentencing conditions, the sentence was determined."

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