Operator of Financial Firm Sentenced to Prison for 3 Billion Won Real Estate NPL Investment Fraud

Im Mo (61, male), the actual operator of 'Company G,' a specialized investment firm in real estate non-performing loans, was recently sentenced to 4 years and 6 months in prison on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.

[Asia Economy Reporter Kim Daehyun] A financial company operator who was prosecuted for embezzling tens of billions of won under the pretext of investing in real estate non-performing loans (NPL) was sentenced to prison in the first trial.

According to the court on the 6th, the Criminal Division 33 of the Seoul Central District Court (Presiding Judge Noh Hoseong) recently sentenced Mr. Lim (61, male), the actual operator of the real estate NPL specialized investment company 'G Corporation', who was indicted for fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, to 4 years and 6 months in prison.

Previously, Mr. Lim was prosecuted on charges of receiving a total of about 3.057 billion won from eight victims between 2015 and 2017 under the pretext of 'NPL investment funds', then using the investment funds to cover other payments or for employee wages, meal expenses, entertainment expenses, etc.

Mr. Lim promised, "I will transfer the financial institution’s mortgage rights on real estate soon to be auctioned to investors and prepay monthly interest income of 12-15% annually until dividends are received. If the dividends received from the court fall short of the principal, I will pay the difference," but the total amount returned to the victims as profit was only about 790 million won.

During the trial, Mr. Lim and his lawyer denied the charges, claiming "We did not deceive the victims." On the other hand, the prosecution argued, "G Corporation did not disclose its difficult financial situation and had neither the intention nor the ability to guarantee the investment principal." Mr. Lim was also indicted for violating the Act on the Regulation of Conducting Fund-Raising Business Without Permission, as he raised about 6.496 billion won from 35 investors related to this business.

The first trial court found Mr. Lim guilty. The court pointed out the fundamental problem of the business, stating, "The greater the difference between the purchase price of the NPL and the dividend amount, the higher the possibility of profit. However, there is no evidence that the defendant had the negotiation power to lower the purchase price or any factors guaranteeing the possibility of profit." It also emphasized that out of the total investment funds of about 9.132 billion won received by Mr. Lim, only about 2.154 billion won was actually used to purchase NPLs.

The court continued, "To operate the business as explained by the defendant, sufficient funds should have been secured to pay investors," and "At the time the investment funds started to be received, G Corporation’s account balance was only about 8.36 million won, and its financial statements showed poor financial status."

The court stated, "Taking advantage of the fact that ordinary individual investors find it difficult to easily understand the principles and status of financial institutions’ NPL sales and real estate auctions, the defendant embezzled a large amount of investment funds through a very cunning method." It added, "The damage is significant, and little recovery has been made." However, it also noted, "Some victims received dividends, so the actual damage appears to be less than the amount embezzled from the defendant."

Mr. Lim has appealed the first trial verdict.

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