'1 Trillion Won Multi-Level Investment Scam' AshSeven CEO Sentenced to 20 Years in First Trial

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-yoon] The CEO of the cosmetics company Ash Seven, who carried out a multi-level investment fraud worth over 1 trillion won, was sentenced to 20 years in prison in the first trial.

The Seoul Eastern District Court Criminal Division 12 (Chief Judge Lee Jong-chae) on the 9th sentenced Ash Seven CEO Eom (58), who was tried on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud), to 20 years in prison. The Ash Seven corporation was fined 1 billion won. The court also sentenced the vice president and director, who were indicted for conspiring with Eom, to 3 years in prison, and 10 others including regional headquarters chiefs to prison terms ranging from 2 to 11 years.

They are accused of embezzling approximately 1.2 trillion won in investment funds from about 7,000 victims over about six years from July 2015 to August last year. They deceived victims by promising "to pay 5% interest on the investment for four months and return the principal in the fifth month." It was also revealed that the company operated on a de facto 'Ponzi scheme' basis, paying promised dividends to existing investors with funds from new investors.

The court explained the sentencing rationale, stating, "The defendant, as the CEO, planned and led the crime in an organized manner, and despite having no prior criminal record of the same kind, severe punishment is necessary. The defendants who were headquarters chiefs were responsible for recruiting investors and had high access to company information, yet actively encouraged investments and have shown no remorse."

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