Prosecutors Arrest and Indict REIT Executive for Embezzling 15.9 Billion Won by Leaking Internal Information

An executive of a real estate specialized asset management company (REIT) who embezzled about 15.9 billion KRW by leaking insider information and inflating construction payments has been brought to trial.

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On the 2nd, the Criminal Division 6 of the Seoul Eastern District Prosecutors' Office (Chief Prosecutor Seo Hyun-wook) announced that six people, including Mr. A (46), an executive director of ㄱ Asset Management Company, were indicted on charges of fraud and bribery under the Act on the Aggravated Punishment of Specific Economic Crimes. Mr. A is in custody, while the other five were released on bail and brought to trial.

They are accused of exploiting the real estate price surge from July 2019 to December 2021 by embezzling profits that investors should have received and purchasing real estate at inflated prices, thereby fueling further price increases. According to the prosecution, the REIT executives received about 950 million KRW from buyers by providing insider information. Additionally, during the real estate price surge, they inflated construction payments and embezzled approximately 3.35 billion KRW of company funds. They also deceived investors and affiliated companies, investing 1.5 billion KRW and monopolizing a net profit of 13.8 billion KRW. Through these crimes, Mr. A embezzled about 15.9 billion KRW.

The prosecution has requested seizure and preservation of 1.53 billion KRW of criminal proceeds. During the investigation, two executives returned about 2.8 billion KRW to investors and others as compensation for damages.

The prosecution stated, "This case is a crime that took advantage of the real estate price surge and contributed to the overall price increase in the real estate market," adding, "We will continue to crack down on structural corruption among asset management company executives and employees."

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