Focused Investigation on Specific Crime Details and Embezzled Funds
Police Plan to Request Arrest Warrants... Attention on Possible Accomplices
[Asia Economy Reporter Yoo Byung-don] The investigation gained momentum as the police secured the custody of Lee Mo (45), an employee of Osstem Implant accused of embezzling 188 billion KRW of company funds.
The Seoul Gangseo Police Station, which is investigating the case, is questioning Lee on the specific details of the crime, the presence of accomplices, and the whereabouts of the embezzled funds as of the 6th. The police plan to soon apply for an arrest warrant for Lee.
◆Where was the embezzled money spent?= Lee is presumed to be the same individual as the "super ant" who purchased and then disposed of a large amount of shares in the KOSDAQ-listed semiconductor manufacturer Dongjin Semichem last year on October 1. This super ant bought 3,917,431 shares, approximately 7.62% of Dongjin Semichem's total stock, for about 143 billion KRW and sold 3,367,431 shares between November 18 and December 20, converting roughly 111.2 billion KRW into cash. Lee is also known to have purchased 851 gold bars weighing 1kg each (worth about 68 billion KRW) and received them in six installments. Immediately after Lee's arrest, the police seized a total of 22 boxes of items, which are highly likely to contain gold bars.
On December 9 last year, Lee gifted a commercial-residential building in Mokdong-dong, Paju City, Gyeonggi Province, to his wife, and another commercial-residential building in Mokdong-dong to his younger sister. On December 21, he gifted another commercial-residential building to his sister-in-law and her husband. On December 27, the loans on the commercial-residential buildings gifted to his wife and sister-in-law's couple (4.03 billion KRW and 3.54 billion KRW respectively), as well as the loan on a commercial-residential building originally owned by his younger sister (3.77 billion KRW), were all repaid.
◆On alert for the existence of accomplices= Osstem Implant has consistently emphasized that Lee acted alone. However, Lee's family members claimed before his arrest that he was acting under instructions from higher-ups. Given the enormous embezzlement amount nearing 200 billion KRW, the police are investigating with the possibility of collusion in mind. The police have identified and are tracking multiple accounts through which the embezzled money appears to have flowed, and depending on the investigation results, the presence of accomplices may be revealed. Prior to Lee's arrest, the police confirmed that the embezzled funds were transferred through multiple accounts via various routes and proceeded to freeze those accounts.
◆Lee's sloppy criminal activities= Inside the police, there is an assessment that despite Lee's bold crime, his movements before and after the crime were sloppy. Lee was reportedly hiding in a four-story commercial building in Mokdong-dong, Paju City, Gyeonggi Province, registered under his wife's name, when he was found by the police on the night of the 5th. At the time of arrest, Lee's wife was on the fourth floor residence, and Lee was hiding on another floor within the building when discovered by the police. The police are conducting a search on the premise that Lee may have hidden the embezzled valuables in the building.
Typically, criminals who commit embezzlement tend to flee abroad or hide in remote areas without personal ties. Lee reportedly largely admitted to his charges upon arrest. He also purchased Dongjin Semichem shares exceeding the 5% reporting threshold and bought gold bars, which are easily traceable, through legitimate transactions. The payment for the gold bars was made using money obtained from selling stocks in a securities account.
◆Is recovery of embezzled funds possible?= Osstem Implant expects no major difficulties in recovering the funds due to frozen accounts and ongoing police investigations. However, full recovery of the embezzled amount is unlikely, and lawsuits from investors are anticipated. If Lee is the super ant of Dongjin Semichem, he recorded losses exceeding 10 billion KRW, and the embezzled funds were dispersed across multiple accounts, making it difficult for the police to trace the money flow.
While the gold bars purchased by Lee can be confiscated, it is expected to be difficult to seize the gifted residential buildings. Only assets acquired through criminal acts can be confiscated, and since Lee acquired ownership of the buildings around 2015-2016, which differs from the embezzlement period, seizure is unlikely.
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