Gangtong Stock Scam Group Extorted 54 Billion Won from Over 10,000 People... Second Trial Also Sentences to Prison

[Asia Economy Reporter Song Seung-yoon] A group that fabricated financial statements to sell 'empty stocks' worth 54 billion won to investors was sentenced to prison again in the second trial.

The Seoul Northern District Court Criminal Division 1-3 (Presiding Judge Noh Jin-young) on the 13th overturned the original sentence of 5 years imprisonment and a fine of about 7.45 billion won for Kim (54), who was indicted on charges including fraud, and 2 years imprisonment for his mistress Lee (49), reducing the fine to about 6.79 billion won. The prison sentences of 5 years and 2 years handed down in the first trial were maintained.

They are accused of deceiving about 10,000 victims over about a year from 2018 to 2019 by selling shares of a cooperative corporation that was to be converted into a stock company soon, collecting investment funds amounting to 54 billion won.

The corporation had no plans to be converted into a stock company and had no business substance, but Kim pretended to be a stock and M&A expert, deceiving investors by saying they could earn up to 10 times the profit. Lee also conspired with Kim by hiding the profits gained from the crime while using the title of company CEO.

The first trial court sentenced them to prison, stating, "This is a fraud crime that disrupts the financial order and produces many victims, causing great social harm." Both the prosecution and the defendants appealed, citing unfair sentencing.

The second trial court also stated, "The defendants were urgently arrested by the police for the crime, but when the arrest warrants were dismissed, they immediately repeated the same crime and tried to hide the criminal proceeds. They also have multiple prior convictions of the same kind, so severe punishment is inevitable." However, it explained the sentencing reason by saying, "The victims also bear some responsibility as they were deceived while trying to gain high profits in a short period, and a significant portion of the damages has been or is likely to be recovered, which was comprehensively considered."

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