'221.5 Billion Embezzlement' Ostem Implant Employee, What Punishment Will They Face?

Current Law Imposes Life Imprisonment or Minimum 5-Year Sentence
Multiple Aggravating Factors Including Concealment of Criminal Proceeds
Minimum 10-Year Imprisonment Unavoidable for Severe Punishment

Lee Mo, who is accused of embezzling 221.5 billion KRW from Osstem Implant, is being transferred to the prosecution on the 14th at Gangseo Police Station in Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yoo Byung-don] Attention is focused on the level of punishment that will be imposed on Lee Mo (45, detained), an employee of Ostem Implant accused of embezzling 221.5 billion won of company funds. Since the amount embezzled is record-breaking and additional charges may be added depending on the investigation results, it is expected that a heavy sentence will likely be handed down.

On the 14th at 7:40 a.m., the Gangseo Police Station in Seoul transferred Lee to the prosecution on charges of embezzlement in violation of the Act on the Aggravated Punishment of Specific Economic Crimes. According to the police, Lee admitted to the charges during a recent investigation, stating that “the crime was committed alone to personally obtain money and valuables.” Lee, a member of Ostem Implant’s financial management team, has been under investigation since being detained on suspicion of transferring 221.5 billion won from the corporate account to his personal account eight times starting from March last year.

Separately from the prosecution transfer, the police are intensively investigating the embezzlement process, including the existence of accomplices. There is ample possibility of additional charges depending on the investigation results, such as conspiracy with family members to conceal criminal proceeds and Lee’s forgery and use of private documents. In particular, the 76.1 billion won loss Lee incurred from stock investments is irrecoverable, causing significant damage to the company and shareholders.

Under current law, embezzlement of 5 billion won or more is punishable by life imprisonment or imprisonment for five years or more. The Supreme Court’s sentencing guidelines for embezzlement crimes recommend a basic sentence of 5 to 8 years for crimes involving 30 billion won or more. If aggravating factors are present, the sentence can be increased to 7 to 11 years. Sentences are also increased when there are a large number of victims or when criminal proceeds are deliberately concealed.

In Lee’s case, shareholder damages continue due to this crime, and circumstances have been confirmed where Lee purchased real estate or gold bars with criminal proceeds and concealed them. Additionally, financial team employees who worked with Lee reportedly testified during police investigations that they forged balance certificates by changing balances using PDF editing software under Lee’s instructions, which could lead to charges such as forgery of private documents.

The sentence applicable to Lee can be inferred from the earlier “Dong-A Construction Manager Park” case. Park, who embezzled nearly 190 billion won of company funds over five years from 2004 by forging withdrawal requests and manipulating documents, was sentenced to 22 years and 6 months in prison in the first trial, a sentence that was upheld as final.

Meanwhile, the police have applied for pre-indictment seizure and confiscation preservation on Lee’s assets worth approximately 33 billion won, including real estate, stocks, and deposits. Pre-indictment seizure preservation prevents the suspect from disposing of illegally acquired assets such as real estate before the court’s verdict on the charges. Pre-indictment confiscation preservation is a measure to prevent the suspect from disposing of assets to recover the amount equivalent to the proceeds obtained through the crime if the suspect has used the criminal proceeds. The prosecution has currently accepted this and filed a request with the court, and the court’s decision on acceptance is expected as early as early next week.