"Embezzled 2.6 Billion Won by Inflating Costs"... Former Hanssem Executives Sentenced to Prison in First Trial
A former Director of External Cooperation at Hanssem, a furniture company, who was put on trial for embezzling approximately 2.6 billion won in company funds, has been sentenced to prison in the first trial.
On October 24, the 11th Criminal Division of the Seoul Western District Court (Presiding Judge Kim Woohyun) sentenced Mr. Lee, the former Director of External Cooperation at Hanssem, to four years in prison for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust). Mr. Heo, a former team leader in the same department who was tried on the same charges, was sentenced to three years in prison, suspended for five years.
They are accused of inflating costs during the process of signing contracts for sponsorships and advertising with business partners, paying 4.4 billion won to agencies operated by themselves or acquaintances, and only passing a portion of those funds to the actual business partners, thereby misappropriating about 2.6 billion won.
Additionally, they are accused of inflating a 55 million won documentary sponsorship fee for a broadcasting company to 110 million won, pocketing the 55 million won difference from the agency, and of creating false notifications to receive about 460 million won from a business partner, despite there being no actual model fee or contract termination fee for a girl group member.
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The court stated, "The employees of the victim company betrayed the trust inherent in their positions by causing the company to pay a total of 2.6 billion won in unnecessary advertising and sponsorship fees to broadcasting companies, inflated sponsorship activities, and model fees that did not need to be paid to agencies. The nature of the crime is extremely serious," adding, "They committed the crime in a cunning and meticulous manner by actively attaching and submitting cue sheets with inflated unit prices when preparing the operating plans."
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